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Flannigan Company manufactures and sells a single product that sells for $400 per unit; variable costs...

Flannigan Company manufactures and sells a single product that sells for $400 per unit; variable costs are $232. Annual fixed costs are $844,200. Current sales volume is $4,210,000. Flannigan Company management targets an annual pre-tax income of $1,135,000. Compute the unit sales to earn the target pre-tax net income.

Multiple Choice

a. 7,763.

b. 8,513.

c. 11,781.

d. 5,025.

e. 17,045.

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Answer #1
computation of unit sale to earn target pretax net income
fixed cost+pretax income/sells per unit-variable cost p.u
here annual fixed cost = 844200
pretax income = 1135000
selling per unit = 400 p.u
variable cost p.u = 232
unit sale = (844200+1135000)/(400-232)
unit sale = 11781
Option "c" Is CORRECT

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