A company desires to sell a sufficient quantity of products to earn a profit of $300,000.If the unit sales price is $20, unit variable cost is $12, and total fixed costs are $600,000, how many units must be sold to earn net income of $300,000?
A)168,750 units
B)112,500 units
C)90,000 units
D)67,500 units

Question

Quizplus · Accepted Answer

To find the number of units needed to achieve a net income of $300,000, use the formula: (Fixed Costs + Desired Profit) / (Sales Price per Unit - Variable Cost per Unit). Here, it is ($600,000 + $300,000) / ($20 - $12) = 112,500 units.

A Company Desires to Sell a Sufficient Quantity of Products