Question

Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.
Sales (7,000 units) $210,000
Variable expenses 136,500
Contribution margin 73,500
Fixed expenses 67,200
Net operating income $6,300
The number of units that must be sold to achieve a target profit of $31,500 is closest to:

A. 16,400 units
B. 42,000 units
C. 35,000 units
D. 9,400 units

Answer 1

Answer:

= 9,400 units

Explanation:

Sales (7,000 units) $210,000

Variable expenses 136,500

Contribution margin 73,500

Fixed expenses 67,200

Net operating income $6,300

The number of units that must be sold to achieve a target profit of $31,500 is closest to:

Contribution Margin per item =  $ 73,500/ 7000 items

       =$ 10.50

Net income= contribution margin- fixed costs

$31,500= 10.50x quantity -67,200.00

$31,500=10.50Q-$ 67,200

10.50 q= 31500+67200

10.50 q= $ 98,700

q= $ 98700/10.50

Quantity = 9,400 units