Question

SmartCorp sells 500 units, resulting in $75,000 of sales revenue, $32,000 of variable costs, and $20,000 of fixed costs. The number of units that must be sold to achieve $41,000 of operating income is: (Round intermediary calculations to two decimal places, and your final answer up to the nearest whole number.)

Answer 1

Answer: 709

Explanation:

selling price per unit will be:

= $75000/500

= $150

Variable cost per unit:

= $32000/500

= $64

Contribution margin per unit = $150 - $64 = $86

Number of units to be sold will now be:

= ($20000 + $41000) / $86

= $61000/$86

= 709