Refer to the table above. How many units will need to be sold in 2017 to generate a gross profit of $150,000?
A) 4,500 units
B) 5,000 units
C) 6,000 units
D) 5,500 units

Question

Quizplus · Accepted Answer

To find out how many units need to be sold to generate a gross profit of $150,000, we need to calculate the total revenue needed to achieve that profit. 
Total Revenue = Total Cost + Gross Profit 
We can rearrange this equation to get the sales revenue required: 
Sales Revenue = Total Cost + Gross Profit 
In this case, total cost is $450,000 and gross profit needs to be $150,000, so: 
Sales Revenue = $450,000 + $150,000 = $600,000 
To find out how many units need to be sold to generate this sales revenue, we can divide the sales revenue by the selling price per unit: 
Number of units = Sales Revenue / Selling Price 
Number of units = $600,000 / $100 = 6,000 units 
Therefore, the answer is choice C.

Refer to the Table Above