Question

SBD Phone Company sells its waterproof phone case for $108 per unit. Fixed costs total $227,000, and variable costs are $48 per unit. Compute the units of product that must be sold to earn pretax income of $203,500.

Answer 1

Answer:

unit required = 7175 units

Explanation:

given data

sells phone case = $108 per unit

Fixed costs total =  $227,000

variable costs = $48 per unit

pretax income = $203,500

solution

we get here first Contribution Per Unit that is

Contribution Per Unit = sells phone case - variable costs    .............1

Contribution Per Unit = $108  - $48

Contribution Per Unit = $60

so here units of product required is

unit required = $\frac{pre\ tax\ income+ fixed\ cost}{Contribution\ Per\ Unit}$    ....................2

put here value

unit required = $\frac{203500+227000}{60}$  

unit required = 7175 units