Phan Company has not reported a profit in five years.This year the company would like to narrow its loss to $7,500.Assuming its selling price is $36.50 per unit and its variable costs per unit are $24,how many units must be sold to achieve its target given that total fixed costs are $60,000? (Do not round intermediate calculations.)
A) 2,188
B) 1,439
C) 4,200
D) 1,600

Question

Quizplus · Accepted Answer

To find the number of units needed to achieve a target loss, use the formula: (Fixed Costs + Target Loss) / (Selling Price per Unit - Variable Cost per Unit). Here, (60,000 + 7,500) / (36.50 - 24) = 4,200 units.

Phan Company Has Not Reported a Profit in Five Years