Question

Bramble corp. wants to sell a sufficient quantity of products to earn a profit of $200000. if the unit sales price is $18, unit variable cost is $8, and total fixed costs are $200000, how many units must be sold to earn income of $200000?

Answer 1

To solve for units sold at an income of $200,000:

First, I would subtract the variable cost of $8 from the unit sales price of $18 dollars which gives you $10.

Unit profit = $10

Fixed costs = $200,000

How many units need to be sold to earn an income of $200,000?

40,000 units x $10 = $400,000 - $200,000 = $200,000

40,000 units need to be sold to earn an income of $200,000.