Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis based on the following assumptions. Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the number of units and then multiply by the selling price per unit.
1. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? Contribution Margin per unit.Contribution Margin Ratio.
2. For 20x2 the selling price per lamp will be $45.00. How many lamps must be sold to breakeven?
Breakeven sales in units.
3. For 20x2 the selling price per lamp will be $45.00. The desired net income in 20x2 is $256,500. What would sales in units have to be in 20x2 to reach the profit goal?Sales in units.
4. For 20x2 the selling price per lamp will be $45.00. The company would like to have a net income equal to 32.00% of sales. If that is to be achieved, what would be the sales in units in 20x2? Sales in units.
5. If the company believed that it could only sell 25,000 lamps, what would the new selling price have to be so that the new contribution margin per unit is equal to last year's contribution margin per unit? New Selling Price.
6. For 20x2 the selling price per lamp will be $45.00. How many units must be sold to generated a net income of $240,000? Sales in units.
7. If the company believes that the demand will be 27,500 units for the year. What selling price per lamp, rounded to two places, would generate a net income of $822,500? New selling price per lamp.