A firm has fixed operating costs of $425,000, a per unit sales price of $38, and a variable cost per unit of $21

Finance Dec 24, 2020

A firm has fixed operating costs of $425,000, a per unit sales price of $38, and a variable cost per unit of $21. A. How many units must they sell to breakeven? B. How many units do they need to sell in order to reach a profit of $250,000

Expert Solution

a. Break even point = Fixed costs / Contribution per unit = 425000 / (38 -21) = 25000 units

b. Desired sales (units) = Profit + Fixed cost / Contribution per unit = ( 425000+250000) /(38-21) = 39706 units

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote