Answer:
c)150,000 units
Explanation:
The cost profit volume analysis shows the relationship between the level of activity, cost and profit. It can be used to solve this problem
The units to be sold to make an income of $100,000 can be determined as follows:
Units to be sold = (Fixed cost + Income)/Sales minus variable cost
Fixed cost = 200,000, Selling price = 10, variable cost - 8, income - 100,000
Units to be sold =( 200,000 + 100,000)/ (10-8)
= 150,000 units
Answer:
The correct option is 150,000 units
Explanation:
The number of units required to make $100,000 profit is given by the below formula:
number of units =fixed costs+target profit/contribution per unit
fixed costs is $200,000
target profit is $100,000
contribution per unit =sales price-variable cost
=$10-$8
=$2
number of units to make $100,000=$200,000+$100,000/$2
=$300,000/2
=150,000 units
In order to make $100,000 profit 150,000 units must be sold
