Norman Company sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $60,000. How many MP3 players must Norman sell to earn net income of $140,000?
A) 10,000.
B) 3,500.
C) 2,500.
D) 3,000.

Question

Quizplus · Accepted Answer

To find the number of MP3 players Norman must sell to earn a net income of $140,000, we use the formula: (Fixed Costs + Desired Net Income) / (Selling Price per Unit - Variable Cost per Unit). Substituting the given values: ($60,000 + $140,000) / ($60 - $40) = 10,000 units.

Norman Company Sells MP3 Players for $60 Each