Ferkil Corporation manufacturers a single product that has a selling price of $25.00 per unit. Fixed expenses total $65,000 per year, and the company must sell 6,500 units to break even. If the company has a target profit of $15,000, sales in units must be:

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To find the sales in units needed to achieve a target profit, use the formula: (Fixed Expenses + Target Profit) / Contribution Margin per Unit. The contribution margin per unit is the selling price minus the variable cost per unit. At break-even, the contribution margin covers fixed expenses, so: $65,000 / 6,500 units = $10 per unit. For a $15,000 profit: ($65,000 + $15,000) / $10 = 8,000 units.

Ferkil Corporation Manufacturers a Single Product That Has a Selling