Multiple Choice Question 137 A company desires to sell a sufficient quantity of products to earn...

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Answer 1

Answer #1

Answer:

Contribution margin per unit
          = Selling price per unit (-) Variable cost per Unit
          =     $ 16 (-) $ 12
          =     $ 4

Unit Sales to earn Taget Income
             = ( Fixed Cost + Taget Income ) / Contribution margin per unit
             =   ( $ 800,000 + $ 240,000 ) / $ 4
             =   $ 1,040,000 / $ 4
             =    260,000 Units

Unit Sales to earn Taget Income = 260,000 Units

Option (a) is Correct

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Answer 2

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