he following information is available for XYZ Company Sales

he following information is available for XYZ Company:

Sales (in units) ................. 5,000 units

Selling price .................... $40 per unit

Variable costs ................... $16 per unit

Fixed costs (in total) ........... $48,000

Calculate the number of units XYZ Company must sell in order to earn a target profit equal to 35% of sales.

Contribution margin=Selling price-Variable Costs

=(40-16)=$24 per unit

Let units sold be x

Hence total Contribution margin=$24x

Target Contribution margin=Fixed cost+Target profits

=48000+(40*0.35x)

Hence

48000+14x=24x

x=48000/(24-14)

=4800 units.