Question
In: Accounting
Data concerning Cutshall Enterprises Corporation's single product appear below: Selling price per unit $ 250.00 Variable...
Data concerning Cutshall Enterprises Corporation's single
product appear below:
| Selling price per unit | $ | 250.00 | |
| Variable expense per unit | $ | 150.60 | |
| Fixed expense per month | $ | 480,964.00 | |
The unit sales to attain the company's monthly target profit of
$22,000 is closest to:
4,927
2,012
3,340
5,060
Solutions
Expert Solution
So the correct option is D
--------------------------------------------------------------------------------------------------------------------------
Sale required to achieve desired profit = (Fixed cost + Desired profit)/ (Sales price per unit - Variable cost per unit)
Where,
Fixed cost = $480964
Selling price = $250
Variable cost = $150.6
Desired profit = $22000
Let's put all the values in the formula,
Required sale = (480964 + 22000)/ (250 - 150.6)
= 502964/ 99.4
= 5060
So to reach desired profit of $22000 required units that must be sold is 5060 units
--------------------------------------------------------------------------------------------------------------------------
Hope that helps.
Feel free to comment if you need further assistance J
ekkarill92 answered 1 year agoRelated Solutions
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