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Homework answers / question archive / Baker Company sells kites for $11
Baker Company sells kites for $11.50 per kite. In FY 2019, total fixed costs are expected to be $250,000 and variable costs are estimated at $3.50 a unit. Baker Company wants to have a FY 2019 operating income of $95,000. Use this information to determine the number of units of kites that Baker Company must sell in FY 2019 to meet this goal. (Round your answer to a whole number)
Answer:
Sales price of kites =$11.50
Less: Variable cost = $3.50
Contribution margin = $8.00
Number of units to sell to attain profit of $95000:
=Fixed cost + expected profits / Contribution margin.
=250000+95000/8
=43,125 kites to be sold
