If the targeted sales are 12 000 units. The sales price per unit is $70, fixed costs are $130 000 and variable costs are $40 per unit, then planned profit must be:

Question

Quizplus · Accepted Answer

To find the planned profit, first we need to calculate the total cost:

Total Cost = Fixed Cost + Variable Cost

Variable cost per unit = $40
Total units to be sold = 12,000

So, Total Variable Cost = $40 x 12,000 = $480,000

Total Cost = Fixed Cost + Total Variable Cost
Total Cost = $130,000 + $480,000
Total Cost = $610,000

Now, we can use the formula to calculate planned profit:

Planned Profit = Total Revenue - Total Cost

Total Revenue = Sales Price per unit x Total units to be sold
Total Revenue = $70 x 12,000
Total Revenue = $840,000

Planned Profit = $840,000 - $610,000
Planned Profit = $230,000

Therefore, the planned profit must be $230,000. Option D is the correct answer.

If the Targeted Sales Are 12 000 Units