Product Y sells for $15 per unit, and has variable expenses of $9 per unit. Fixed expenses total $300,000 per year. How many units of Product Y must be sold each year to yield an annual profit of $90,000?
A) 50,000 units
B) 65,000 units
C) 15,000 units
D) 43,333 units

Question

Quizplus · Accepted Answer

To find out how many units of Product Y must be sold to yield an annual profit of $90,000, use the following formula:

Profit = (Sales Price x Number of Units Sold) - (Variable Expenses x Number of Units Sold) - Fixed Expenses

Substituting the given values, we get:

$90,000 = ($15 x Q) - ($9 x Q) - $300,000

Solving for Q, we get:

Q = 65,000 units

Therefore, the answer is B - 65,000 units.

Product Y Sells for $15 Per Unit, and Has Variable