Boening Enterprises, Inc., produces and sells a single product whose selling price is $130.00 per unit and whose variable expense is $39.00 per unit. The company's monthly fixed expense is $509,600.
-Assume the company's monthly target profit is $11,000. The unit sales to attain that target profit is closest to:

Question

Quizplus · Accepted Answer

The formula to calculate the unit sales to attain a target profit is:

(Unit Sales x Selling Price) - (Unit Sales x Variable Expense) - Fixed Expenses = Target Profit

Substituting the values given:

(X x $130.00) - (X x $39.00) - $509,600 = $11,000

Solving for X (unit sales):

$91.00X - $509,600 = $11,000

$91.00X = $520,600

X = 5,721

Therefore, the unit sales to attain a target profit of $11,000 is 5,721, which corresponds to option D.