Question

Question 2 4.5 pts Pure Water Products produces a water filter that attaches to the faucet an cleans all water that passes through the faucet. During 2019, 38,000 units of the water filter were sold to customers. Information related to the wat er filter product appears below: Contribution margin ...... Variable costs Fixed costs (in total) ........... $28.30 per unit $43.20 per unit $833,220 Calculate the number of units of the water filter that Pure Water Products needed to sell in 2019 in order to earn a net income equal to 18% of sale S.

Answer 1

sale price per unit = contribution margin +variable costs

=>28.30+43.20

=>$71.50.

let x be the number of units sold

total revenue will be = $71.50*x.

total contribution will be = $28.30 x

required profit = 18% of sale revenue

=>$71.50*x*18%

=>$12.87x.

so,

total contribution - fixed costs = required profit

=>28.30x - 833,220 =12.87x.

=>15.43x = 833,220.

=>x = 54,000 units.

54,000 units are to be sold to get a net income of 18% of sales.