Question

SBD Phone Company sells its waterproof phone case for $108 per unit. Fixed costs total $227,000, and variable costs are $48 per unit. Compute the units of product that must be sold to earn pretax income of $203,500.

Answer 1

unit required = 7175 units

Step-by-step explanation:

given data

sells phone case = $108 per unit

Fixed costs total = $227,000

variable costs = $48 per unit

pretax income = $203,500

solution

we get here first Contribution Per Unit that is

Contribution Per Unit = sells phone case - variable costs .............1

Contribution Per Unit = $108 - $48

Contribution Per Unit = $60

so here units of product required is

unit required =
`(pre\ tax\ income+ fixed\ cost)/(Contribution\ Per\ Unit)` ....................2

put here value

unit required =
`(203500+227000)/(60)`

unit required = 7175 units