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

Question

Quizplus · Accepted Answer

To realize 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.

If Fixed Costs Are $700,000 and the Unit Contribution Margin