Tilba Auto Parts has reported sales of $440,000,a contribution margin of $8 per unit,fixed costs of $114,000 and a profit of $42,000.How many units did they sell?

Question

Quizplus · Accepted Answer

Using the formula:

Sales - Variable Costs - Fixed Costs = Profit

We can rearrange it to find the number of units sold:

Units Sold = (Profit + Fixed Costs) / Contribution Margin

Units Sold = ($42,000 + $114,000) / $8 = 19,500 units.

Tilba Auto Parts Has Reported Sales of $440,000,a Contribution Margin