To find the number of units to sell to earn a targeted income, it is acceptable to simply adjust the break-even units equation by adding target income to the variable cost.

Question

Quizplus · Accepted Answer

To find the number of units to sell to earn a targeted income, you should add the target income to the fixed costs before dividing by the contribution margin per unit (selling price per unit - variable cost per unit). Simply adding target income to the variable cost does not correctly adjust the break-even units equation for this purpose.

To Find the Number of Units to Sell to Earn