A product sells for $20 per unit,and has a contribution margin ratio of 40%.Fixed expenses total $120,000 annually.How many units must be sold to yield a profit of $30,000?

Question

Quizplus · Accepted Answer

The contribution margin per unit is $20 * 40% = $8. To cover fixed expenses and achieve a profit of $30,000, the total contribution margin needed is $120,000 + $30,000 = $150,000. Therefore, the number of units needed is $150,000 / $8 = 18,750 units.

A Product Sells for $20 Per Unit,and Has a Contribution