Per Unit Sales $1,200,000 $60.00 Less Variable Expenses 800,000 $40.00 Contribut

Question

Per Unit Sales $1,200,000 $60.00 Less Variable Expenses 800,000 $40.00 Contribution Margin $400,000 $20.00 Less Fixed Expenses 300,000 Net Income $100,000 And using the data again, how many units would the company have to sell to attain target profits of $125,000?  Show your work. Per Unit Sales $1,200,000 $60.00 Less Variable Expenses 800,000 $40.00 Contribution Margin $400,000 $20.00 Less Fixed Expenses 300,000 Net Income $100,000 And using the data again, how many units would the company have to sell to attain target profits of $125,000?  Show your work. Per Unit Sales $1,200,000 $60.00 Less Variable Expenses 800,000 $40.00 Contribution Margin $400,000 $20.00 Less Fixed Expenses 300,000 Net Income $100,000

Explanation / Answer

Hi,

Please find the answer as follows:

Sales (Units) = (Fixed Cost + Desired Profit)/Contribution Margin Per Unit = (300000 + 125000)/20 = 21250 Units.

Thanks.

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