Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. If Melody wants to earn an operating profit of $880, how many units must it sell?

Question

Quizplus · Accepted Answer

To find the number of units needed to achieve the desired profit, use the formula: (Fixed Costs + Desired Profit) / (Selling Price per Unit - Variable Cost per Unit). Here, it is ($5,040 + $880) / ($14 - $10) = 1,480 units.

Melody Company Sells a Product for $14, Variable Costs Are