Question

10) Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of variable costs, and $350,000 of fixed costs. The number of helicopters that must be sold to achieve $320,000 of operating income is ________. A) 151 units B) 104 units C) 79 units D) 130 units

Answer 1

Answer: A) 151 units

Step-by-step explanation:

We would apply the formula which is expressed as

N = (FC + OP)/[(R - VC)/TU]

Where

N represents the number of helicopters that must be sold.

FC represents the fixed cost

OP represents the operating income required.

R represents revenue

VC represents variable cost

TU represents the total number of units sold.

From the information given

FC = 350000

OP = 320000

R = 840000

VC = 260000

TU = 130

Therefore,

N = (350000 + 320000)/[(840000 - 260000)/130]

N = 670000/4461.54

N = 151 units rounded up to the nearest whole number