Genuine Auto Parts has reported sales of $500 000, a contribution margin of $8 per unit, fixed costs of $75 000 and a profit of $45 000. How many units did they sell?

Question

Quizplus · Accepted Answer

To find the number of units sold, use the formula: Profit = (Contribution Margin per Unit * Units Sold) - Fixed Costs. Rearranging gives Units Sold = (Profit + Fixed Costs) / Contribution Margin per Unit. Substituting the given values: Units Sold = ($45,000 + $75,000) / $8 = 15,000 units.

Genuine Auto Parts Has Reported Sales of $500 000, a Contribution