Figure 4-7.A company provided the following data:

-Refer to Figure 4-7. How many units must be sold to earn a profit of $40,000?

Question

Figure 4-7.A company provided the following data:
 
-Refer to Figure 4-7. How many units must be sold to earn a profit of $40,000?

Quizplus · Accepted Answer

To determine the number of units the company needs to sell to earn a profit of $40,000, we need to find the break-even point (where revenue equals expenses) and then add $40,000 to the profit. 
The break-even point is where the revenue equation (y = 110x) equals the expenses equation (y = 70x + 840,000):

110x = 70x + 840,000

Simplifying:

40x = 840,000

x = 21,000

So, the break-even point is 21,000 units. To earn a profit of $40,000, we need to sell an additional:

40,000 / 40 = 1,000

units.

Therefore, the total units that need to be sold to earn a profit of $40,000 is 21,000 + 1,000 = 22,000.

Figure 4-7.A Company Provided the Following Data