Target Profit Woodsman Company sells a product for $250 per unit. The variable cost is $90...
Target Profit
Woodsman Company sells a product for $250 per unit. The variable cost is $90 per unit, and fixed costs are $752,000.
Determine (a) the break-even point in sales units and (b) the break-even point in sales units required for the company to achieve a target profit of $135,360.
| a. Break-even point in sales units | units | |
| b. Break-even point in sales units required for the company to achieve a target profit of $135,360 | units |
Homework Answers
| a.break even point in sales units | 4,700 units |
| b.brek even point in sales unit to achieve target profit $135,360 | 5,546 units |
working :
break even point = fixed costs / contribution per unit
=>$752,000 / (250-90)
=>4,700 units.
to achieve a target profit =>(Fixed costs +target profit) / (contribution per unit)
=>(752,000 + 135,360) / (250-90)
=>5,546 units.
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Target Profit
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