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Ocean City Kite Company sells kites for $9.00 per kite. In FY 2019, total fixed costs...

Ocean City Kite Company sells kites for $9.00 per kite. In FY 2019, total fixed costs are expected to be $240,000 and variable costs are estimated at $3.00 a unit. Ocean City Kite Company wants to have a FY 2019 operating income of $90,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal. (Round your answer to a whole number)

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Answer #1

The sale price of the kites is $ 9 per kite

Variable cost are $ 3 per kite

Contribution per unit is $ 6 per kite

Target number of units = (Target operating income + Expected fixed costs) / Contribution per kite

= (90,000 + 240,000) / 6 = 55,000 kites

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