Question

Boland Company sells a product that is priced at $30 per unit. The per unit contribution margin is equal to 15 percent of the sales price. If fixed cost amount to $71,500 and the company has a desired profit of $36,500, the number of units that must be sold to earn the desired profit is

Answer 1

Break-even point= 4,216 units

Step-by-step explanation:

Giving the following information:

Boland Company sells a product that is priced at $30 per unit. The per-unit contribution margin is equal to 15 percent of the sales price. The fixed cost amount to $71,500 and the company has the desired profit of $36,500.

To calculate the number of units, we need to use the break-even point formula:

Break-even point= (fixed costs + desired profit) / contribution margin

Break-even point= (71,500 + 36,000) / (30*0.85)= 107,500/25.5

Break-even point= 4,216 units