Bug-Ez Corporation manufactures one product,Itch-A-Way,which,when applied to a bug bite,soothes the itch.The unit contribution margin for Itch-A-Way is $4.20,while total fixed costs amount to $537,000.Given a selling price of $8.25 per unit and a target profit of $147,000,Bug-Ez must sell:

Question

Quizplus · Accepted Answer

To find the number of units Bug-Ez must sell to achieve the target profit, use the formula: (Fixed Costs + Target Profit) / Contribution Margin per Unit. Here, it is ($537,000 + $147,000) / $4.20 = 162,857.14, which rounds to 162,858 units.

Bug-Ez Corporation Manufactures One Product,Itch-A-Way,which,when Applied to a Bug Bite,soothes