Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80.The company's monthly fixed expense is $396,480 per month.The unit sales to attain the company's monthly target profit of $13,000 is closest to:

Question

Quizplus · Accepted Answer

Unit CM = Selling price per unit - Variable expenses per unit
= $120.00 per unit - $52.80 per unit
= $67.20 per unit
Unit sales to attain a target profit = (Target profit + Fixed expenses) ÷ Unit CM
= ($13,000 + $396,480) ÷ $67.20 per unit
= $409,480 ÷ $67.20 per unit
= 6,093 units

Hettrick International Corporation's Only Product Sells for $120