Fill in the Blank QuestionFill in the blank question.RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. RST desires to earn a target income of $20,000. The sales level in dollars to achieve the desired target income is $.

To solve this problem, we first need to calculate the contribution margin per unit, which is the selling price per unit minus the variable cost per unit.

Selling price per unit = $10 Variable cost per unit =$6

So, Contribution margin per unit = Selling price per unit - Variable cost per unit = $10 -$6 = $4

Next, we calculate the break-even point in units, which is the fixed costs divided by the contribution margin per unit.

Fixed costs = $30,000 Contribution margin per unit =$4

So, Break-even point in units = Fixed costs / Contribution margin per unit = $30,000 /$4 = 7,500 units

To achieve the desired target income, we need to sell additional units. The number of additional units is the target income divided by the contribution margin per unit.

Target income = $20,000 Contribution margin per unit =$4

So, Additional units to sell = Target income / Contribution margin per unit = $20,000 /$4 = 5,000 units

Therefore, the total units to sell to achieve the desired target income is the break-even point in units plus the additional units to sell.

Total units to sell = Break-even point in units + Additional units to sell = 7,500 units + 5,000 units = 12,500 units

Finally, the sales level in dollars to achieve the desired target income is the total units to sell times the selling price per unit.

Selling price per unit = $10 Total units to sell = 12,500 units

So, Sales level in dollars = Selling price per unit * Total units to sell = $10 * 12,500 units =$125,000

To find the sales level in dollars to achieve the desired target income, we first need to calculate the contribution margin per unit, which is the selling price per unit minus the variable cost per unit.

Step 1: Calculate the contribution margin per unit Selling price per unit = $10 Variable cost per unit =$6 Contribution margin per unit = Selling price per unit - Variable cost per unit = $10 -$6 = $4

Next, we need to calculate the break-even point in units, which is the fixed costs divided by the contribution margin per unit.

Step 2: Calculate the break-even point in units Fixed costs = $30,000 Contribution margin per unit =$4 Break-even point in units = Fixed costs / Contribution margin per unit = $30,000 /$4 = 7,500 units

To find the sales level in units to achieve the desired target income, we add the target income to the fixed costs and divide by the contribution margin per unit.

Step 3: Calculate the sales level in units to achieve the desired target income Target income = $20,000 Fixed costs =$30,000 Contribution margin per unit = $4 Sales level in units = (Target income + Fixed costs) / Contribution margin per unit = ($20,000 + $30,000) /$4 = 12,500 units

Finally, to find the sales level in dollars, we multiply the sales level in units by the selling price per unit.

Step 4: Calculate the sales level in dollars Sales level in units = 12,500 units Selling price per unit = $10 Sales level in dollars = Sales level in units * Selling price per unit = 12,500 units *$10 = $125,000

So, the sales level in dollars to achieve the desired target income is $125,000.