Final answer:
The formula to calculate the units needed to meet a target net income in cost-volume-profit (CVP) analysis is to divide the sum of total fixed costs and the target net income by the contribution margin per unit. This correct choice is option 'a'.
Step-by-step explanation:
The student is asking about a formula related to break-even analysis in managerial accounting. When calculating how many units are needed to achieve a target net income, the correct formula is: units required to meet target net income = (total fixed cost + target net income) / contribution margin per unit. This means the answer is 'a. total fixed cost plus target net income divided by contribution margin per unit.'
It's important to understand that this formula is derived from the cost-volume-profit (CVP) analysis, which is used to determine how changes in costs and volume affect a company's operating income and net income. In calculating the units required, both fixed and variable costs, as well as the desired profit, are considered. The contribution margin per unit is the selling price per unit minus the variable cost per unit, which provides the amount available to cover fixed costs and profits.