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3 years ago

Break-Even Sales and Sales to Realize Income from Operations

Business

1 answer:

strojnjashka [21]3 years ago

4 0

Answer and Explanation:

The computation is shown below:

Contribution per unit

= Selling price per unit - Variable costs per unit

= $300 - $200

= $100 per unit

Now

Break even point (units)

= Fixed costs ÷ Contribution margin per unit

= $14,000,000 ÷ $100

= 140,000 units

And,

Sales units required for a target profit of $1,400,000

So,

= (Fixed costs + Target profits) ÷ Contribution margin per unit

= ($14,000,000 + $1,400,000) ÷ $100

= 154,000 units

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