Homework Answers
Ans. Option B 35,000 packets
*Working Notes:
*Calculation for contribution margin per unit:
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $6 - $2
= $4 per unit
*Calculation of sales units for desired profit:
Sales units for desired profit = (Fixed cost + Desired profit) / Contribution margin per unit
= ($120,000 + $20,000) / $4
= $140,000 / $4
= 35,000 packets
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