Question

Bonita Industries wants to sell a sufficient quantity of products to earn a profit of $200000. If the unit sales price is $9, unit variable cost is $8, and total fixed costs are $200000, how many units must be sold to earn income of $200000?

Answer 1

400,000 units

Step-by-step explanation:

we are going to add in the dividend of the BEPunits formula the target profit.

`(fixed \: cost + target \: profit)/(cotribution \: margin \: per \: unit) = units \: to \: achieve \: target \: profit`

`(200000 + 200000)/(9 - 8) = 400000`

contribution per unit = sales - variable

9 -8 = 1

fixed cost + target profit

200,000+200,000 = 400,000

400,000/1 =400,000