Zhao Co. has fixed costs of $416,000. Its single product sells for $185 per unit, and variable costs are $121 per unit. Compute

Question

2 years ago

10

the level of sales in units needed to produce a target (pretax) income of $128,000.

1 answer:

lions [1.4K] · Answer 1 · 2023-02-14T16:45:20+03:00

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