How many units would have to be sold to yield a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20?
A)4,800 units
B)4,400 units
C)4,000 units
D)3,600 units
E)1,600 units

Question

Quizplus · Accepted Answer

Target operating income = $22,000Unit selling price = $20Variable cost per unit = $15Total fixed costs = $2,000Contribution margin per unit = $20 - $15 = $5Target operating income / Contribution margin per unit = Number of units to be sold$22,000 / $5 = 4,400 units

How Many Units Would Have to Be Sold to Yield