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Target Profit Beard Company sells a product for $15 per unit. The variable cost is 10 per unit, and fixed costs are 1,750,000
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Answer #1
a. Break- even point in sales units 350,000 units
b. Break- even point in sales units required for the company to achieve a target profit of $400,000 430,000 units

Explanation:-

a. Break-even point in sales units = Fixed cost/ Contribution margin per unit
Break- even point in sales units = $1,750,000/$5
Break- even point in sales units = 350,000 units
Note:- Contribution margin = $15-$10 =$5
b. Break- even point in sales units to achieve a target profit of $400,000 = fixed cost + Targeted profit/ Contribution margin per unit
Break- even point in sales units= $1,750,000 +$400,000/$5
Break- even point in sales units = $2,150,000/$5
Break- even point in sales units = 430,000 units
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