Answer:
13,915 units
Explanation:
With regards to the above, we need to determine first the target or desired profit.
Desired profit = $121,000 × 15% = $18,150
The next step is to calculate the contribution margin, which is the difference between selling price and variable cost.
Contribution margin = Sales - Variable cost
Contribution margin = $67 - $57
Contribution margin = $10 per unit
Target sales is therefore;
Target sales = (Fixed cost + Target profit) / Contribution margin
Target sales = ($121,000 + $18,150) / $10
Target sales = $139,150 / $10
Target sales = 13,915 units
