Answer:
12,320 units
Explanation
First we have to determine the target profit.
Desired Profit = $112,000 x 10% = $11,200
Now we will calculate the contribution margin which is a net value of selling price and variable cost.
Contribution margin = Sales - Variable cost
Contribution margin = $35 - $25
Contribution margin = $10 per unit
Formula for target sales is as follow
Target Sales = ( Fixed cost + Target profit ) / Contribution margin
Target Sales = ( $112,000 + $11,200 ) / $10
Target Sales = $123,200 / $10 = 12,320 units
