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Ainat [17]
3 years ago
12

SBD Phone Company sells its waterproof phone case for $90 per unit. Fixed costs total $162,000, and variable costs are $36 per u

nit. Compute the units of product that must be sold to earn pretax income of $200,000.
Business
1 answer:
tigry1 [53]3 years ago
4 0

Answer:

6,704 units

Explanation:

The computation of the number of units sold is shown below:

= (Fixed expenses + target profit) ÷ (Contribution margin per unit)  

where,  

Contribution margin per unit = Selling price per unit - Variable expense per unit  

= $90 per unit - $36 per unit

= $54 per unit

So, the number of units sold is

= ($162,000 + $200,000) ÷ ($54 per unit)

= 6,704 units

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