Data concerning Strite Corporation's single product appear below: Assume the company's target profit is $17,000. The unit sales to attain that target profit is closest to:

Question

Data concerning Strite Corporation's single product appear below:  Assume the company's target profit is $17,000. The unit sales to attain that target profit is closest to:

Quizplus · Accepted Answer

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

Contribution margin per unit = $38 - $24 = $14

Next, we can use the following formula to calculate the unit sales needed to attain the target profit:

Unit Sales = (Fixed Costs + Target Profit) ÷ Contribution Margin per unit

Plugging in the numbers:

Unit Sales = ($50,000 + $17,000) ÷ $14 = 4,057 units

Therefore, the closest unit sales to attain the target profit of $17,000 is 4,057 units.

Data Concerning Strite Corporation's Single Product Appear Below: Assume