9514 1404 393
Answer:
(a) 412
(b) 3196
Step-by-step explanation:
(a)
The contribution margin of each unit is $48.70 -7.40 = $41.30. The number of units required to cover the investment cost is ...
$17,000/($41.30/unit) = 411.62 units ≈ 412 units
The company must sell 412 units to break even.
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(b)
The number of units required to cover the investment and produce a profit of $115,000 is ...
($17,000 +115,000)/($43.10/unit) = 3196.13 units ≈ 3196 units
The company must sell 3196 units to make a profit of $115,000.
