Question

Required information (The following information applies to the questions displayed below.) Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1.500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $50,000 27,500 22,500 14,850 $ 7,650 10. How many units must be sold to achieve a target profit of $13,500? Number of units

Answer 1

Correct Answer:

Units to be sold for profit of 13,500	1260 UNITS

working:

A	Sales revenue per unit (50,000 /1000)	$          50.00
B	Less: Variable cost per unit (27,500/1000 )	$          27.50
C =A-B	Contribution margin	$          22.50
D	Fixed Cost	$ 14,850.00
E	Target profit	$ 13,500.00
F =D+E	Total	$ 28,350.00
G =F/C	Units to be sold for profit of 13500	1260

End of answer.

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