Question

10. How many units must be sold to achieve a target profit of $7,906? (Do not round Intermediate calculations.) Number of units Required Information References eBook & Resources The following information applies to the questions displayed below.) Worksheet Leaming Objective: 03-03 USE contribution margin ratio (CM compute changes in contributi margin and net operating inco resulting from changes in sale volume. Oslo Company prepared the following contribution format income stat a sales volume of 1,000 units (the relevant range of production is 500 units): Difficulty Leaming Objective: 03-04 Sht effects on net operating incort changes in variable costs, fixe selling price, and volume. Sales Variable expenses Contribution margin $25,700 13.900 11,800 7788 Fixed expenses Net operating income $ 4,012 lective: 03-01 L eaming Objective: 03-05 Del

Answer 1

Number of Units to be sold 1330 Target Profit Add : Fixed Costs Desired contribution Contribution margin per unit No. of units to be sold ( 15694/11.80) $ $ $ $ 7,906 7,788 15,694 11.80 1330 No. of units to be sold = Desired contribution / Contribution margin per unit Working Notes : Contribution margin per unit = Total Contribution margin/No. of units sold = $ 11800 / 1000 = $11.80