Asked by mykeria adkins on Jul 22, 2024
Verified
Assume the company's target profit is $17,000.The unit sales to attain that target profit is closest to:
A) 5,804 units
B) 2,921 units
C) 4,057 units
D) 10,433 units
Target Profit
The anticipated profit that a company aims to achieve within a specific time period.
Unit Sales
The quantity of a product sold by a company in a specific period.
- Assess the sales volume essential to achieving set profit targets, quantified in dollars and units.
Verified Answer
HC
Heather CortinaJul 27, 2024
Final Answer :
C
Explanation :
Target profit = Total revenue - Total cost
We need to find the unit sales to attain the target profit. Let's use the formula:
Total revenue = Unit price x Unit sales
Total cost = Fixed cost + Variable cost
Target profit = (Unit price x Unit sales) - (Fixed cost + Variable cost)
We know that the target profit is $17,000, fixed cost is $20,000 and variable cost per unit is $8. Using the formula, we can rearrange it to solve for unit sales:
Unit sales = (Target profit + Fixed cost) / (Unit price - Variable cost)
Unit price is given as $24. Using that, we can calculate the unit sales closest to the target profit:
Unit sales = (17,000 + 20,000) / (24 - 8) = 4,057.1429
The closest value is 4,057 units, which is answer choice C.
We need to find the unit sales to attain the target profit. Let's use the formula:
Total revenue = Unit price x Unit sales
Total cost = Fixed cost + Variable cost
Target profit = (Unit price x Unit sales) - (Fixed cost + Variable cost)
We know that the target profit is $17,000, fixed cost is $20,000 and variable cost per unit is $8. Using the formula, we can rearrange it to solve for unit sales:
Unit sales = (Target profit + Fixed cost) / (Unit price - Variable cost)
Unit price is given as $24. Using that, we can calculate the unit sales closest to the target profit:
Unit sales = (17,000 + 20,000) / (24 - 8) = 4,057.1429
The closest value is 4,057 units, which is answer choice C.
Explanation :
Unit CM = Selling price per unit - Variable expenses per unit
= $150.00 per unit - $42.00 per unit = $108.00 per unit
Unit sales to attain a target profit = (Target profit + Fixed expenses)÷ Unit CM
= ($17,000 + $421,200)÷ $108.00 per unit
=$438,200 ÷ $108.00 per unit = 4,057 units
= $150.00 per unit - $42.00 per unit = $108.00 per unit
Unit sales to attain a target profit = (Target profit + Fixed expenses)÷ Unit CM
= ($17,000 + $421,200)÷ $108.00 per unit
=$438,200 ÷ $108.00 per unit = 4,057 units
Learning Objectives
- Assess the sales volume essential to achieving set profit targets, quantified in dollars and units.
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