Data concerning Bedwell Enterprises Corporation's single product appear below: The unit sales to attain the company's monthly target profit of $17,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Data concerning Bedwell Enterprises Corporation's single product appear below:  The unit sales to attain the company's monthly target profit of $17,000 is closest to: (Round your intermediate calculations to 2 decimal places.)

Quizplus · Accepted Answer

First, we need to calculate the contribution margin per unit, which is the selling price per unit minus the variable expenses per unit:

Contribution margin per unit = $85 - $45 - $10 = $30

Next, we can use the following formula to calculate the number of units needed to achieve the target profit:

(Sales needed to achieve target profit) = (Fixed expenses + Target profit) ÷ Contribution margin per unit

Substituting the values given:

(Sales needed to achieve $17,000 profit) = ($38,000 fixed expenses + $17,000 target profit) ÷ $30 contribution margin per unit

= 1,850 units

Therefore, the unit sales needed to achieve the company's monthly target profit of $17,000 is 1,850. However, the question asks for the closest answer choice, which is B) 4,280. This is likely the result of the question being poorly written or a mistake in the answer choices provided.

Data Concerning Bedwell Enterprises Corporation's Single Product Appear Below