If the sales price per unit is $75, variable expenses per unit are $40, target operating income is $22,000, and total fixed expenses are $16,500, how many units must be sold to reach the target operating income?
A) 963
B) 1,100
C) 629
D) 513

Question

Quizplus · Accepted Answer

To reach the target operating income, we use the formula: Units = (Fixed Expenses + Target Operating Income) / (Sales Price per Unit - Variable Expenses per Unit). Plugging in the values: Units = ($16,500 + $22,000) / ($75 - $40) = $38,500 / $35 = 1,100 units.

If the Sales Price Per Unit Is $75, Variable Expenses