24 Most Valuable Professor Winney Company sells MP3 players

24). Most Valuable Professor Winney Company sells MP3 players for (SP) $60 each. Variable costs (V/e) are $40 per unit, and fixed costs (F/C) total $60,000. How many MP3 players must MVP Mullen sell to earn net income (NI or TP) of $140,000?

A) 10,000.

B) 3,500.

C) 2,500.

D) 3,000.

Solution

Particulars Desired Net Income 140000 Add: Fixed Costs 60000 A Total Contribution required 200000 B Contribution Margin PU 20.00 A/B Units to be sold 10000 Answer is A 10000 Working Note: Sales Price 60.00 Less: Variable Cost 40.00 Contribution Margin 20.00