One Finger Staples produces a single stapler that it sells for $15 per unit.If variable costs per unit are $6 and fixed costs total $42,300, how many units must the company sell in order to earn a profit of $12,150?

Question

Quizplus · Accepted Answer

To find the number of units needed to earn a profit of $12,150, first calculate the contribution margin per unit, which is the selling price ($15) minus the variable cost ($6), equaling $9. Then, add the desired profit ($12,150) to the fixed costs ($42,300) to get the total amount needed to cover costs and profit, which is $54,450. Finally, divide this total by the contribution margin per unit ($9) to find the number of units: $54,450 / $9 = 6,050 units.

One Finger Staples Produces a Single Stapler That It Sells