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Calculate selling price that will be required for product

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Reference no: EM131797302

Jackman, Inc., makes and sells many consumer products. The firm's average contribution margin ratio is 30%. Management is considering adding a new product that will require an additional $12,000 per month of fixed expenses and will have variable expenses of $6 per unit.

Required:

a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 30%. (Round your answer to 2 decimal places.)

b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $8,800. (Do not round your intermediate calculation and round your final answer to nearest whole number.)

 

Reference no: EM131797302

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