Unit variable expenses $13.50
Total fixed expenses $367,900
Contribution margin ratio .28



Compute the following:
a) sales price per unit
b) breakeven point in units
c) target sales in dollars assuming a target operating income of $100,000

Please stop posting the same question.

What have you gotten so far for work towards the answer? We can't help you if we don't know how far you have gotten or where you are stuck.

We will help you, but we will not do your homework for you.

I am stuck on the whole thing. I do not know what formulas to use in order to figure it out. Any help that you could give me would be great. I am so confused on how to do this problem.

You need to become familiar with the definitions of the terms used in the problem. "Contribution" is the difference between a product's selling price and its variable cost. This "contribution" to the business when you sell an item helps cover fixed costs, and once fixed costs are fully recovered contributes to profit. "Contribution Margin" is the ratio of contribution per unit to sales priceper unit. So for (a) you use this: Contribution margin = (price - variable cost)/price. Now solve for price. For (b) first calculate the contribution per unit - which is the product's price (from a) times contribution margin, then divide that into the total fixed cost of the business. That tells you how many units you have to sell so that the total contribution is equal to the fixed costs. For (c) calculate how many more units above (b) you need to generate $100K more margin. Can you take it from here?