Mandy's Music, Inc. produces a hip-hop CD that is sold for $15. The contribution margin ratio is 40%. Fixed expenses total $6,750.
Instructions
(a) Compute the variable cost per unit.
(b) Compute how many CDs Mandy's Music will have to sell in order to break even.
(c) Compute how many CDs Mandy's Music will have to sell in order to make a target net income of $16,200.

Question

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The Answer of Mandy's Music, Inc. produces a hip-hop CD that is sold for $15. The contribution margin ratio is 40%. Fixed expenses total $6,750.
Instructions
(a) Compute the variable cost per unit.
(b) Compute how many CDs Mandy's Music will have to sell in order to break even.
(c) Compute how many CDs Mandy's Music will have to sell in order to make a target net income of $16,200.