Given a break- even point of 88,000 units and a contribution margin per unit of $9.60, the total number of units that must be sold to reach a net pre- tax profit of $18,096 is:
A) 1,885 units
B) 89,885 units
C) 88,000 units
D) indeterminable

Question

Quizplus · Accepted Answer

To find the total number of units needed to reach a net pre-tax profit of $18,096, you add the break-even units to the additional units needed to cover the desired profit. The additional units are calculated by dividing the desired profit by the contribution margin per unit: $18,096 / $9.60 = 1,885 units. Adding these to the break-even point: 88,000 + 1,885 = 89,885 units.

Given a Break- Even Point of 88,000 Units and a Contribution