If a firm with $49,000 in fixed costs breaks even on unit sales of 7,000, how many units must the firm sell to earn $30,000 in operating profit?
A)30,000 units
B)11,286 units
C)15,824 units
D)There is not enough information to determine the unit sales required

Question

Quizplus · Accepted Answer

To find the number of units needed to earn a $30,000 profit, calculate the contribution margin per unit at the break-even point, which is $49,000/7,000 = $7. Then, solve for the units needed to cover both fixed costs and desired profit: ($49,000 + $30,000)/$7 = 11,286 units.

If a Firm with $49,000 in Fixed Costs Breaks Even