Question

Data concerning Bedwell Enterprises Corporation's single product appear below:
Selling price per unit $ 185.00
Variable expense per unit $ 94.00
Fixed expense per month $ 437,240
The unit sales to attain the company's monthly target profit of $24,000 is closest to:__________ (Do not round intermediate calculations.)
a. 5,069
b. 4,907
c. 4,805
d. 2,493

Answer 1

Answer:

Number of units= 5,069

Explanation:

Giving the following information:

Selling price per unit $ 185.00

Variable expense per unit $ 94.00

Fixed expense per month $ 437,240

Desired profit= $24,000

To calculate the number of units to be sold, we need to use the following formula:

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= 461,240 / (185 - 94)

Break-even point in units= 5,069 units

Answer 2

Answer:Unit sales to attain the company;s monthly target = 5,069---A

Explanation:

Total desired  Contribution =Fixed cost+Target profits

= $437,240 + $24,000 =$461,000

Contribution margin = Selling price per unit -variable expense per unit

= $185 -$94 =$91

of $24,000

Break even point / unit sales to attain= Total desired  Contribution/ Contribution margin

= $461,240/ $91

= 5,068.57

rounded to  5,069 units