Question

0.5/1 0.5/1 Question 2 View Policies Show Attempt History Current Attempt in Progress Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $26 each, and her variable costs are $16 per basket. She incurs $12,400 in fixed costs each year. Your answer is correct. How many baskets will Marissa have to sell this year if she wants to earn $28,100 in operating income? (Round answer to 0 decimal places, e.g. 5,275.) 4050 baskets e Textbook and Media Attempts: 1 of 12 used

Answer 1

Sales required to earn desired profit = (Fixed cost + Operating income) / Contribution margin p.u.

= ($12,400 + $28,100) / $10 p.u

= $40,500 / $10 p.u

= 4,050 baskets

Where,

Contribution margin p.u. = Selling price p.u. - Variable cost p.u.

= $26 - $16

= $10