If fixed costs are $1,500,000, the unit selling price is $250, and the unit vari

Question

If fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130, what is the amount of sales required to realize an operating income of $200,000? a. 14,166 units b. 12,500 units c. 16,000 units d. 11,538 units The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information: Setups Inspections Assembly (DLH) Hooks - 4,000 units 1 4 1 Nooks - 8,000 units 2 1 3 Activity Pool Activity Base Budgeted Amount Setups 20,000 $ 60,000 Inspections 24,000 120,000 Assembly (DLH) 28,000 420,000 ____ 39. Calculate the total factory overhead to be charged to each unit of Hooks. a. $38.00 b. $50.00 c. $16.67 d. $23.00

Explanation / Answer

Operating Income = Revenues - Variable Cost - Fixed Cost

Let the unit of sales required be 'X'

Target Operating Income = $200,000

So, $250x - $130x - $1,500,000 = $200,000

=> 120x = $1,700,000

=> x = 14,166 units

Thus, the amount of sales required is 14,166 units (Option-a)

Note :- For the second question, may I request you to please post it again with proper heading and figures under the heading as it is hard to understand the exact question

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