A computer store has a profit goal of $50,000 for computers selling for $1,000 per unit. Its fixed costs are $30,000, and its contribution margin is $100. According to break-even analysis, how many units must be sold to meet the profit goal?
A) Cannot tell without more data
B) 5,000
C) 1,000
D) 800
E) 3,000

Question

Quizplus · Accepted Answer

To meet the profit goal, the formula to use is: (Fixed Costs + Profit Goal) / Contribution Margin per Unit = (30,000 + 50,000) / 100 = 80,000 / 100 = 800 units.

A Computer Store Has a Profit Goal of $50,000 for Computers