Question

The following information pertains to the Lurkins Company:

Sales price per unit = $300;
Variable cost per unit = $220;
Total fixed costs = $500,000;
Net income = $100,000.

What were unit sales for the company?

Answer 1

Answer: 7500

Step-by-step explanation:

Let x be the number of units sales for the company.

Total sales = 300x [ Sales price per unit x number of units]

total variable cost = 220x [ Variable cost per unit x number of units]

Total sales - Total variable cost - Total fixed cost = Net income

`\Rightarrow\ 300x-220x-500000=100000\\\\\Rightarrow\ 80x= 600000\\\\\Rightarrow\ x=(600000)/(80)\\\\\Rightarrow\ x=7500`

Hence, 7500 units sales for the company.