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A Total of 30,000 Units Were Sold Last Year

Question 310
Multiple Choice

A total of 30,000 units were sold last year.The contribution margin per unit was $2,and total fixed expenses were $20,000 for the year.This year,fixed expenses are expected to increase to $26,000,but the contribution margin per unit will remain unchanged at $2.How many units must be sold this year to earn the same operating income as was earned last year? A) 23,000 units. B) 33,000 units. C) 30,000 units. D) 13,000 units.Units required = (26,000 + 40,000)/2 = 33,000 units.

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Q 311
A product sells for $20 per unit and has a contribution margin ratio of 40%.Fixed expenses total $240,000 annually.How many units of the product must be sold to yield an operating income of $60,000? A) 37,500 units. B) 40,000 units. C) 65,000 units. D) 30,000 units.
Q 312
Lindsay Company reported the following results from sales of 5,000 units for the month of June: Assume that Lindsay increases the selling price of the product by 10% on July 1.How many units would have to be sold in July in order to generate an operating income of $20,000? A) 4,000 units. B) 4,300 units. C) 4,500 units. D) 5,000 units.Units required = (60,000 + 20,000)/20 = 4,000 units.
Q 313
Austin Manufacturing had the following operating data for the year just ended: Management plans to improve the quality of its only product by replacing a component that costs $3.50 with a higher-grade component that costs $5.50,and renting a packing machine for $18,000 a year.If the desired target operating profit is $288,000,how many units must the company sell? A) 19,300 units. B) 21,316 units. C) 22,500 units. D) 20,842 units.
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