A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Question

BlackTom AI · Accepted Answer

Begin by identifying the key values given: selling price per unit is 20, the contribution margin ratio (CMR) is 40%, fixed costs are 120,000, and the target profit is 30,000.
Next, convert the contribution margin ratio into a per-unit contribution amount. Since CMR is 40% of the selling price, the contribution margin per unit = 0.40 × 20 = 8.
Then determine the total amount of contribution needed to cover fixed costs and achieve the desired profit. This is fixed costs plus target profit: 120,000 + 30,000 = 150,000.
To find the number of units required, divide the total required contribution by the contribution margin per unit: 150,000 ÷ 8 = 18,750.
Thus, the calculation shows that 18,750 units must be sold to reach the profit goal, given the stated price, margin, and costs.

MCD2150 - T2 - 2025 Week 10 Workshop 1 Quiz

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

View Explanation

Log in for full answers

Similar Questions

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler