Question

Marigold Corp. wants to sell a sufficient quantity of products to earn a profit of $100000. If the unit sales price is $13, unit variable cost is $8, and total fixed costs are $200000, how many units must be sold to earn income of $100000?

Answer 1

Units to be sold= 60,000

Step-by-step explanation:

Giving the following information:

The unit sales price is $13, the unit variable cost is $8, and the total fixed costs are $200,000.

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

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

Break-even point in units= (200,000 + 100,000) / (13 - 8)

Break-even point in units= 60,000

Units to be sold= 60,000