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Sears targets $40,000 income before taxes. Sears has fixed costs of $320,000 and Sears expects each unit will have a contribu
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Answer #1

CONTRIBUTION IS (SALES - VARIABLE COST ) OR FIXED COST + PROFIT


WHEN THEY SELL 24000 UNITS THEY WILL GET 24000*15 = $360000 AS CONTRIBUTION WHICH THEY CAN UTILISE FOR ADJUSTING THE FIXED COST THEY ARE INCUURING.

PROFIT = CONTRIBUTION - FIXED COST

PROFIT = $360000-$320000= $40000.

ANS- THEY MUST SOLD 24000 UNITS TO GET THE DESITRE INCOME.

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