Given breakeven sales in units of 22,000 and a unit contribution margin of $2.40, how many units must be sold to reach a target operating income of $4,524?
A) 4,863
B) 11,671
C) 23,885
D) 1,885

Question

Quizplus · Accepted Answer

To reach a target operating income of $4,524 with a unit contribution margin of $2.40, you divide the target operating income by the unit contribution margin: $4,524 / $2.40 = 1,885 units. However, this is the additional number of units needed on top of the breakeven point. The breakeven sales in units are 22,000, so the total units needed to reach the target operating income are 22,000 + 1,885 = 23,885 units.

Given Breakeven Sales in Units of 22,000 and a Unit