If targeted sales are 12,000 units,the sales price per unit is $70,fixed costs are $130,000,and variable costs are $40 per unit,then planned profit must be $360,000.

Question

Quizplus · Accepted Answer

To find the planned profit, we can use the formula: 
Planned Profit = (Sales Price per unit - Variable Cost per unit) * Number of units sold - Fixed Costs

Plugging in the given values, we get:
Planned Profit = ($70 - $40) * 12,000 - $130,000
Planned Profit = $30 * 12,000 - $130,000
Planned Profit = $360,000 - $130,000
Planned Profit = $230,000

Therefore, the planned profit is $230,000, not $360,000. So the statement is false.

If Targeted Sales Are 12,000 Units,the Sales Price Per Unit