Question

13 Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $42,00

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Answer #1

Ans 8000 units

VARIABLE COST = BREAK EVEN SALES - FIXED COST
VARIABLE COST = (6000*20) - 42000
VARIABLE COST = 78000
VARIABLE COST PER UNIT = VARIABLE COST / NO OF UNITS
78000 / 6000
13.00
BREAK EVEN FOR TARGET PROFIT = (FIXED COST + TARGET PROFIT) / CONTRIBUTION PER UNIT
(FIXED COST + TARGET PROFIT) / (SALES PRICE - VARIABLE COST)
(42000 + 14000) / (20 - 13)
8000 UNITS
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