Question

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. What is the amount of sales in units (rounded to a whole number) required to realize an operating income of $200,000

Answer 1

Break-even point in units= 14,167 units

Step-by-step explanation:

Giving the following information:

Fixed costs= $1,500,000

Selling price is $250

Unitary variable costs are $130

Desired profit= $200,000

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= (1,500,000 + 200,000) / (250 - 130)

Break-even point in units= 14,167 units