Question

For the current year ended October 31, Friedman Company expects fixed costs of $14,300,000, a unit variable cost of $250, and a unit selling price of $380. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize income from operations of $2,405,000.

Answer 1

Answer:

128,500 units

Explanation:

The computation of required to realize income from operations is shown below:-

Required sales in (units) = Target contribution margin ÷ contribution margin per unit

= (Fixed cost + target income from operations) ÷ (Selling price per unit - variable cost per unit)

= ($14,300,000 + 2,405,000) ÷ ($380 - $250)

= $16,705,000 ÷ $130

= 128,500 units