Answer:
To make a profit the company must sell 11601 units.
Step-by-step explanation:
Giving the following information:
Fixed costs=$580,000
Unitary variable costs= $50
Unitary selling price= $100
First, we need to calculate the break-even point in units:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 580,000 / (100 - 50)
Break-even point in units= 11,600 units
To make a profit the company must sell 11601 units.
In order to determine the total profit, you need to use the following formula:
Total profit= 50*x - 580,000
x= units sold
For example:
x= 15,000
Total profit= 50*15,000 - 580,000
Total profit= $170,000
