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Enterprise LLC has provided the following contribution format income statement for the sales of 5,000 units:
Sales $ 375,000
Variable costs 275,000
Contribution margin 100,000
Fixed costs 68,000
Net operating income $ 32,000
Answer the following two questions related to the data above for Enterprise LLC:
Problem 1) If the number of units sold incrases by 3,000 units, sales price decreases $2 per unit, variable costs increase $3 per unit and fixed costs decrease $5,000, what would be the resulting net operating income?
Problem 2) Estimate how many units must be sold to achieve a target profit of $150,000.
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