If fixed costs are $600,000 and the unit contribution margin is $12, what amount of units must be sold in order to realize an operating income of $100,000?

Question

Quizplus · Accepted Answer

To find the number of units needed to achieve a specific operating income, use the formula: (Fixed Costs + Desired Operating Income) / Unit Contribution Margin. Here, ($600,000 + $100,000) / $12 = 58,334 units.

If Fixed Costs Are $600,000 and the Unit Contribution Margin