Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. What is the amount of sales in units (rounded to a whole number) required to realize an operating income of $200,000?
A) 14,167 units
B) 12,500 units
C) 16,000 units
D) 11,538 units

Question

Quizplus · Accepted Answer

The correct answer is A.The contribution margin per unit is $250 - $130 = $120. The operating income of $200,000 divided by the contribution margin per unit of $120 gives the number of units required to realize the operating income, which is 14,167 units.

Piper Technology's Fixed Costs Are $1,500,000, the Unit Selling Price