Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 25

Cunningham Audio sells headphones and would like to earn after-tax profits of $100 every week. Each set of headphones costs $5 and sells for $10. Rent and other fixed costs are $200 per week, and the tax rate is 20 percent. How many headphones must Cunningham sell per week to meet this goal?

Step 1 of 3

Target Profit

The target profit and breakeven analysis presents the required unit sales or dollar sales by the company to achieve the desired level of profit by the company. The target profit for the company is computed as below: