Which of the following equations calculates the number of units to sell to earn a targeted income?
A) Number of Units to Earn Target Income = (Total Fixed Cost + Target Income) / Contribution Margin per Unit
B) Number of Units to Earn Target Income = (Fixed Costs + Target Income) / Sales
C) Number of Units to Earn Target Income = Fixed Costs / Contribution Margin Ratio
D) Number of Units to Earn Target Income = Variable Costs / Contribution Margin Ratio
E) Number of Units to Earn Target Income = Total Cost / Contribution Margin per Unit

Question

Quizplus · Accepted Answer

This equation takes into account both fixed costs and variable costs (through contribution margin per unit) to determine the number of units needed to sell in order to earn a specific target income.

Which of the Following Equations Calculates the Number of Units