Drake Company's contribution format income statement for the most recent year appears below:
-If the company desires a net operating income of $20,000,the number of units needed to be sold is:

Question

Drake Company's contribution format income statement for the most recent year appears below: 
-If the company desires a net operating income of $20,000,the number of units needed to be sold is:

Quizplus · Accepted Answer

Unit contribution margin = Selling price per unit - Variable expenses per unit = P - V
= ($650,000 F1F1F1S1F1F1F10 26,000 units)- ($442,000 F1F1F1S1F1F1F10 26,000 units)
= $25 per unit - $17 per unit = $8 per unit
Unit sales to attain a target profit = (Target profit + Fixed expenses)F1F1F1S1F1F1F10 Unit CM
= ($20,000 + $234,000)F1F1F1S1F1F1F10 $8 per unit
= $254,000 F1F1F1S1F1F1F10 $8 per unit
= 31,750 units

Drake Company's Contribution Format Income Statement for the Most Recent