Homework SourseDuring May XYZ Company sold 9000 units and reported the foll
During May, XYZ Company sold 9,000 units and reported the following income statement: Sales ............................ $540,000 Variable costs ................... 216,000 Fixed costs ...................... 117,000 Net income ....................... $207,000 Calculate the number of units XYZ Company needed to sell in May in order to earn a target profit equal to 45% of sales.
Solution
Answer is 13000 Units
Contribution Per Units =(540000-216000)/9000 =36 Per Unit
Let X is the Number of Units to be Sold to earn a target profit equal to 45% of sales.
X = (Fixed Cost + Desired Profit)/Contrbution Per unit
X=(117000+.45X*60)/36
36X=117000+.45X*60
X=13000 units
117000+X*.45*60=36*X
X=
| 117000+X*.45*60=36*X X= |
