If the unit sales price is $16 and variable costs are $6, how many units have to be sold to earn a profit of $3,000 if fixed costs equal $14,000?
Multiple Choice
1,400 units
14,300 units
1,700 units
300 units
Answer : C =1700 Units.
>> Target Sales units = ( Fixed cost + Desired profit ) / Contribution margin per unit.
>> Contribution margin per unit = $ 16 - $ 6 = $ 10.
>> Target sales units = [ ( $ 14000 + $ 3000 ) / $ 10 ] = 1700 units
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