Jinx Company wishes to sell enough products to earn a profit of $200,000. If the unit selling price is $20, unit variable cost is $11, and total fixed costs are $700,000, how many units must be sold to earn target net income of $200,000?

Question

Quizplus · Accepted Answer

(Total Fixed Costs + Net Income) / unit contribution margin = Number of units that must be sold to earn net income) = ($700,000 + $200,000)/ ($20 - $11) = 100,000 units.

Jinx Company Wishes to Sell Enough Products to Earn a Profit