Answer the following questions using the information below:
Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs.
-The number of units that must be sold to achieve $60 000 of operating profit is:
A)10 000 units.
B)11 666 units.
C)12 000 units.
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

To achieve $60,000 of operating profit, the total contribution margin must cover both the fixed costs and the desired profit. The contribution margin per unit is ($100,000 - $40,000) / 10,000 = $6. To find the required units: ($12,000 + $60,000) / $6 = 12,000 units.

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