If total fixed expenses are $65,000, the target operating income is $15,000 and the contribution margin is $25 per unit, the sales needed to achieve the target operating income will be 3,200 units.

Question

Quizplus · Accepted Answer

Fixed expenses + Target operating income = Total sales needed

$65,000 + $15,000 = $80,000

Contribution margin per unit = Sales price per unit - Variable expenses per unit

$25 = Sales price per unit - Variable expenses per unit

Sales price per unit = Variable expenses per unit + $25

To find the number of units needed:

Number of units needed = Total sales needed / Sales price per unit

Number of units needed = $80,000 / (Variable expenses per unit + $25)

Therefore, we cannot find the exact number of units needed without knowing the variable expenses per unit. This question is incomplete and cannot be accurately answered as given.

If Total Fixed Expenses Are $65,000, the Target Operating Income