Answer:
Results are below.
Explanation:
<u>First, we need to calculate the total fixed costs:</u>
Total fixed costs= 3,500 + (120*2*15)
Total fixed costs= $7100
<u>Now, using the following formula, we can determine the break-even point in units:</u>
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 7,100 / (100 - 40)
Break-even point in units= 118.33 = 119 units
<u>Finally, the number of units to earn $10,000 in profit:</u>
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (7,100 + 10,000) / 60
Break-even point in units= 285