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Nutka1998 [239]
3 years ago
14

Starling Co. manufactures one product with a selling price of $18 and variable cost of $12. Starling’s total annual fixed costs

are $38,400. If operating income last year was $28,800, what was the number of units Starling Sold?
Business
1 answer:
nikitadnepr [17]3 years ago
7 0

The number of units that Starling Co. sold was 11200

<u>Explanation:</u>

Given -

Operating income = $28,800

Fixed cost = $38,400

Selling price of one unit = $12

Variable cost = $12

Number of units sold, n = ?

Contribution  margin per unit = $18 - $12

                                                 = $6

n = \frac{operating income + fixed cost}{contribution margin per unit}

n = \frac{28800 + 38400}{6} \\\\n = \frac{67200}{6} \\\\n = 11200

Therefore, number of units that Starling Co. sold was 11200

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