Answer:
To maintain the same level of income, BabyMart will need to sell an additional ________ units per month:
C. 25
Explanation:
Net Income = Total Revenues – Total Expenses
Considering this formula:
-Total revenues is the result of the sales price for the number of units: 315*u.
-The fixed cost is: 50000-5000=45000.
-The variable costs is the result of the variable cost per unit for the number of units: 115*u.
Replacing this in the formula:
40.000=(315*u)-45.000-(115*u)
40000+45000=200u
u=85000/200=425
Number of additional units: 425-400= 25
The additional number of units babymart needs to sell to maintain the same level of income is 25 units.
The fixed cost = $50,000 - $5,000 = $45,000
Therefore,
To determine the Net income, we have to subtract the total revenues from the total expenses. This can be expressed as:
Net income = Total revenue – Total expenses
If we substitute the above value, then we have
Recall, net income = 40,000, therefore we have:
40,000 = (315 × x) – 45,000 – (115X)
40,000 + 45,000 = (315 × X) (115 × X)
85,000 = (315x) – (115x)
85000 = 200X (divide both side by 200)
85,000 / 200 = 200X / 200
425 = X
X = 425
Therefore, we have to subtract the derived value from the monthly sale (400) cribs
Thus, 425 – 400
= 25.
Therefore, the additional number of units babymart needs to sell to maintain the same level of income is 25 units.
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