Question

hao company has fixed costs of $403,200. its single product sells for $183 per unit, and variable costs are $120 per unit. compute the units that must be sold to achieve a target income of $126,000.

Answer 1

To achieve a target income of $126,000, hao company must sell 2,000 units.

Step-by-step explanation:

To calculate the units that must be sold to achieve a target income of $126,000, we need to consider the fixed costs, selling price per unit, and variable costs per unit.

Step 1: Calculate the contribution margin per unit by subtracting the variable cost per unit from the selling price per unit. In this case, the contribution margin is $183 - $120 = $63.

Step 2: Calculate the number of units needed to cover the fixed costs by dividing the target income by the contribution margin. In this case, the units needed are $126,000 / $63 = 2,000 units.

Therefore, hao company must sell 2,000 units to achieve a target income of $126,000.