Question

Sheridan Corporation has fixed costs of $648,640. It has a unit selling price of $7.40, unit variable cost of $5.68, and a target net income of $1,522,000. Compute the required sales in units to achieve its target net income. Required sales units

Answer 1

The answer is = 1,262,000units

Step-by-step explanation:

Fixed cost = $648,640

Unit selling price = $7.40

Unit cost price = $5.68

Target profit/net income= $1,522,000

Unit Contribution margin = Unit selling price - unit variable cost

$7.40 - $5.68

=$1.72

Sales in units to achieve its target net income = (fixed Cost + target profit or net income)/unit contribution margin

($648,640 + $1,522,000)/$1.72

=$2,170,649 / $1.72

=1,262,000units

Therefore, Sheridan Corporation needs to sell =1,262,000units to achieve a target income of $1,522,000.