Question

Maziarz Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit $ 220.00 Variable expense per unit $ 72.60 Fixed expense per month $ 548,328 Assume the company’s target profit is $14,000. The unit sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.) (A) 7,746 units(B) 2,556 units(C) 4,706 units(D) 3,815 units

Answer 1

Answer:

(D) 3,815 units

Explanation:

In this question we use the formula of break-even point in unit sales which is shown below:

= (Fixed expenses + target profit) ÷ (Contribution margin per unit)

where,

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $220 - $72.60

= $147.40

And, the other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= ($548,328 + $14,000) ÷ ($147.40)

= ($562,328) ÷ ($147.40)

= 3814.97 units