If total fixed expenses are $50,000,the target operating income is $10,000 and the contribution margin is $15 per unit,the sales needed to achieve the target operating income will be 4,000 units.

Question

Quizplus · Accepted Answer

The formula for calculating the sales needed to achieve the target operating income is as follows:
Sales = (Total Fixed Expenses + Target Operating Income) / Contribution Margin per Unit

Substituting the given values, we get:
Sales = ($50,000 + $10,000) / $15 per unit
Sales = $60,000 / $15 per unit
Sales = 4,000 units

Therefore, the answer is A)True.

If Total Fixed Expenses Are $50,000,the Target Operating Income Is