The Herald Company manufactures and sells a single product which sells for $50 per unit and has a contribution margin ratio of 30%.The company's monthly fixed expenses are $25,000.If Herald desires a monthly target net operating income equal to 20% of sales dollars,sales in units will have to be (rounded):

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Selling price = $50 per unit
CM ratio = 0.30
Fixed expenses = $25,000
Target profit = 0.20 F1F1F1S1F1F1F10 Dollar sales
Dollar sales to attain a target profit = (Target profit + Fixed expenses)F1F1F1S1F1F1F10 CM ratio
Dollar sales = [(0.20 F1F1F1S1F1F1F10 Dollar sales)+ $25,000] F1F1F1S1F1F1F10 0.30
0.30 F1F1F1S1F1F1F10 Dollar sales = (0.20 F1F1F1S1F1F1F10 Dollar sales)+ $25,000
0.10 F1F1F1S1F1F1F10 Dollar sales = $25,000
Dollar sales = $25,000 F1F1F1S1F1F1F10 0.10 = $250,000
Unit sales = Dollar sales F1F1F1S1F1F1F10 Selling price = $250,000 F1F1F1S1F1F1F10 $50 per unit = 5,000 units

The Herald Company Manufactures and Sells a Single Product Which