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Cedar Mills Incorporated desires an operating income of $72,000. Its variable expenses are $20,000 and its...

Cedar Mills Incorporated desires an operating income of $72,000. Its variable expenses are $20,000 and its total fixed expenses have increased from $32,000 to $60,000. Its unit contribution margin is $10. Its sales in units to achieve the target profit is

A. 15,200. B. 11,200 .C. 1,200. D. 13,200.

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Answer #1

Sales in Units to Achieve target profit = Contribution margin required / Contribution margin per unit

= ( Desired operating income + fixed cost) / $ 10

= ($72,000 + $ 60,000) / $ 10

= 13,200

Hence the correct answer is D. 13,200

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