Asked by Maggie Nicole on Apr 28, 2024
Verified
A product is sold for $45 and has variable costs of $33 per unit.The total fixed costs for the firm are $180,600.If the firm desires to earn a pretax income of $77,400,how many units must be sold?
Pretax Income
The amount of income earned by a business before taxes are deducted.
Fixed Costs
Expenses that do not change with changes in the volume of production or sales, such as rent, salaries, and insurance.
Variable Costs
Costs that vary directly with the level of production or sales activity.
- Evaluate the unit sales needed to realize the set pre-tax financial goals.
Verified Answer
PS
Patrycja SzymikMay 03, 2024
Final Answer :
Unit sales targeted income = Fixed Costs + Targeted pretax income/CM per unit
($180,600 + $77,400)/($45 - $33)= 21,500 units
($180,600 + $77,400)/($45 - $33)= 21,500 units
Learning Objectives
- Evaluate the unit sales needed to realize the set pre-tax financial goals.