Given break-even sales in units of 56,000 and a unit contribution margin of $6, how many units must be sold to reach a target operating income of $24,000?

Question

Quizplus · Accepted Answer

To reach a target operating income of $24,000 with a unit contribution margin of $6, the number of units needed is calculated by dividing the target operating income by the unit contribution margin: $24,000 / $6 = 4,000 units. Since the break-even point is at 56,000 units, to achieve the target income, the total units sold must be 56,000 (to break even) + 4,000 (to reach the target income) = 60,000 units.

Given Break-Even Sales in Units of 56,000 and a Unit