Zhao Co. has fixed costs of $416,000. Its single product sells for $185 per unit, and variable costs are $121 per unit. Compute
the level of sales in units needed to produce a target (pretax) income of $128,000.
1 answer:
9514 1404 393
Answer:
8,500 units
Step-by-step explanation:
The contribution margin from each unit is ...
$185 -121 = $64
To accumulate a total contribution that will cover the fixed costs and the desired income, you require sales of ...
($416,000 +128,000)/($64/unit) = 8,500 units
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