Question

Caneer Corporation produces and sells a single product. Data concerning that product appear below:

Selling price per unit $ 240.00
Variable expenses per unit $ 81.60
Fixed expense per month $ 997,920
The unit sales to attain the company's monthly target profit of $44,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

a. 12,769

b. 6,578

c. 4,341

d. 7,896

Answer 1

Break-even point in units= 6,578 units

Step-by-step explanation:

Giving the following information:

Selling price per unit $ 240.00

Variable expenses per unit $ 81.60

Fixed expense per month $ 997,920

Desired profit= $44,000

To calculate the number of units to be sold, we need to use the following formula:

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (997,920 + 44,000) / (240 - 81.6)

Break-even point in units= 6,578 units