Rogers Racers makes toy race cars that sell for $12 each with a variable cost of $5 per car.Annual fixed costs are $7,000.How many cars must be sold to earn a profit of $3,150?

Question

Quizplus · Accepted Answer

To find the number of cars needed to earn a profit of $3,150, first calculate the contribution margin per car: $12 (selling price) - $5 (variable cost) = $7. Then, use the formula: (Fixed Costs + Desired Profit) / Contribution Margin = ($7,000 + $3,150) / $7 = 1,450 cars.

Rogers Racers Makes Toy Race Cars That Sell for $12