A product sells for $20 per unit and has a contribution margin ratio of 40%.Fixed expenses total $240,000 annually.How many units of the product must be sold to yield a profit of $60,000?

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Quizplus · Accepted Answer

To find the number of units needed to achieve a profit of $60,000, first calculate the contribution margin per unit: $20 * 40% = $8. Then, use the formula: (Fixed Expenses + Desired Profit) / Contribution Margin per Unit = ($240,000 + $60,000) / $8 = 37,500 units.

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