Question

Question Help The following information pertains to the Flying Fig​ Corporation: Total Units for information given ​7,000 Fixed Cost per Unit ​$100 Selling Price per Unit ​$450 Variable Costs per Unit ​$150 Target Operating Income ​$300,000 How many units need to be sold in order to reach the target​ profit? A. ​3,333 units B. ​1,000 units C. ​6,667 units D. ​2,333 units

Answer 1

To reach the target profit, the company needs to sell 1,500 units.

Step-by-step explanation:

To calculate the number of units that need to be sold in order to reach the target profit, we need to use the formula:

Target profit = (Selling Price per Unit - Variable Costs per Unit) × Number of Units - Fixed Cost per Unit × Number of Units

Given that the target operating income is $300,000, the selling price per unit is $450, the variable costs per unit is $150, and the fixed cost per unit is $100, we can calculate:

300,000 = (450 - 150) × Number of Units - 100 × Number of Units

Re-arranging the equation, we get:

450 × Number of Units - 150 × Number of Units - 100 × Number of Units = 300,000

Combining like terms, we have:

200 × Number of Units = 300,000

Dividing both sides by 200, we find:

Number of Units = 300,000 / 200

Number of Units = 1,500

Therefore, the company needs to sell 1,500 units in order to reach the target profit.

Answer 2

You can simply calculate by the following formula:

Target Profit= Target Operating Income/(Sales Price-Variable Cost)

Answer is B

Step-by-step explanation:

T.P= 300,000/(450-150)

T.P= 300,000/300

T.P= 1000