Question

If the sale price per unit is $75, variable expenses per unit are $40, target operating income is $22,000, and total fixed expenses are $16,500, how many units must be sold to reach the target operating income

Answer 1

1,100 units

Step-by-step explanation:

The computation of the units sales to achieve target operating income is shown below:

Unit sales is

= (Fixed expenses + target operating income) ÷ (contribution margin per unit)

= ($16,500 + $22,000) ÷ ($75 - $40)

= ($38,500) ÷ ($35)

= 1,100 units

We simply applied the above formula so that the correct value could come

And, the same is to be considered