A company desires to sell a sufficient quantity of products to earn a profit of $260000....
A company desires to sell a sufficient quantity of products to earn a profit of $260000. If the unit sales price is $20, unit variable cost is $12, and total fixed costs are $800000, how many units must be sold to earn net income of $260000?
A. 72500 units
B. 113000 units
C. 216250 units
D. 132500 units
Homework Answers
| Desired income: $ 260,000 | ||||
| Fixed cost: $ 800,000 | ||||
| Desired contribution :Desired income+Fixed cost =260,000+800,000 =1060,000 | ||||
| Selling price per unit =20 per unit | ||||
| Variable cost per unit: 12 per unit | ||||
| Contribution margin per unit =Selling price -Variable cost =20-12 = $ 8 per unit | ||||
| Target sales in units: Desired contribution/ Contribution margin per unit | ||||
| 1060,000/8 = 132,500 units | ||||
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A company desires to sell a sufficient quantity of products to
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