Winkle produces tables. The tables sell for $900, and the fixed monthly operatin

Question

Winkle produces tables. The tables sell for $900, and the fixed monthly operating costs are as follows: ent $800 2,000 474 ages Other expenses Winkle determined that for every dollar of sales, $0.65 went to cover his fixed costs, and anything above that point was profit. Winkle wishes to earn $4,000 of operating profit each month. Calculate the number of tables Firestorm will need to sell to achieve the target profit. Round your answer up to the nearest whole table.) Select one: a. 12 tables b. 9 tables c. None of the above d. 4 tables

Explanation / Answer

Let the number of tables sold = X

Sale price of 1 table = $900

Target profit = $ 4000

Fixed operating cost = 0.65 per dollar

Profit = 1 - fixed operating cost = 1 - 0.65 = 0.35

Operating profit = (Sale price per table- cost) * Number of table sold

$ 4000 = 0.35 * 900 * X

X = 4000 / 315

X = 12 Tables

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