Question

Hughes Company manufactures harmonicas which it sells for $ 34 each. Variable costs for each unit are $ 15 and total fixed costs are $ 9 comma 675. How many units must be sold to earn income of $ 6 comma 000​?

Answer 1

825 units

Step-by-step explanation:

In this question we use the formula of break-even point in unit sales which is shown below:

= (Fixed expenses + target profit) ÷ (Contribution margin per unit)

where,

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $34 - $15

= $19

And, the other items values would remain the same

Now put these values to the above formula

So, the value would equal to

= ($9,675 + $6,000) ÷ ($19)

= ($15,675) ÷ ($19)

= 825 units