A product sells for $20 per unit, and has a contribution margin ratio of 40%. Fixed expenses are $120,000. How many units must be sold to yield a profit of $30,000?

Name: A product sells for $20 per unit, and has a contribution margin ratio of 40%. Fixed expenses are $120,000. How many units must be sold to yield a profit of $30,000?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Contribution margin per unit = $20 x 40% = $8Profit = $30,000Units to be sold = Profit / Contribution margin per unit = $30,000 / $8 = 18,750 units

A Product Sells for $20 Per Unit, and Has a Contribution