Question

up V ENIE Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total
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Answer #1

Computation the sales in units is:

Sales in units = (Fixed expenses + Target profit) / Total contribution margin

= ($48,000 + $14,000) / $8

= $62,000 / $8

= 7,750 units

Hence, the sales in units is 7,750 units.

Working notes:

Computation the total contribution margin is:

Total contribution margin = Fixed costs / Number of units sold

= $48,000 / 6,000

= $8

Hence, the total contribution margin is $8.

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