Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17.What amount of units must be sold in order to realize an operating income of $100,000?
A) 5,000
B) 41,176
C) 47,059
D) 58,882

Question

Quizplus · Accepted Answer

To achieve an operating income of $100,000 with fixed costs of $700,000 and a unit contribution margin of $17, the total contribution margin needed is $800,000 ($700,000 fixed costs + $100,000 operating income). Dividing this total by the unit contribution margin ($800,000 / $17) gives 47,059 units.

Johnson's Plumbing's Fixed Costs Are $700,000 and the Unit Contribution