How many units must be sold to earn a profit

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Question - Based on the information below, you are required to answer the following two questions:

Sales Price 120

Variable manufacturing cost per unit 60

Variable selling cost per unit 20

Fixed manufacturing costs 180,000

Fixed selling costs 60,000

Q1. What is the break-even point in units?

a. 6,000 units

b. 4,500 units

c. 3,000 units

d. 4,000 units

Q2. How many units must be sold to earn a profit-before-tax of $40,000?

a. 3,667 units

b. 7,000 units

c. 4,667 units

d. 5,500 units

 

Reference no: EM132619476

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