Question

A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a target income of $10,000. The sales level in dollars to achieve the desired target income is $ .

Name: a company produces a product with variable costs of 250 per unit the product sells for 500 per unit the company has fixed costs of 3000 and desires a target income of 10000 the sales level i 91713
Uploaded: 2022-04-24T08:58:12-08:00
Duration: 1 min 32 s
Channel: Niamat Khuda
Description: a company produces a product with variable costs of 250 per unit the product sells for 500 per unit the company has fixed costs of 3000 and desires a target income of 10000 the sales level i 91713

          A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a target income of $10,000. The sales level in dollars to achieve the desired target income is $ .

Added by Erin C.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Niamat Khuda

04/24/2022

Step 1

Given: Variable cost per unit = $2.50 Selling price per unit = $5.00 Contribution margin ratio = (Selling price - Variable cost) / Selling price Contribution margin ratio = ($5.00 - $2.50) / $5.00 Contribution margin ratio = $2.50 / $5.00 Contribution margin Show more…

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A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a target income of $10,000. The sales level in dollars to achieve the desired target income is $ .