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Home Q & A Board Other Fields Homework Help Business Accounting
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tftc4e tftc4e
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5 years ago
Aspen Manufacturers produces flooring material. The monthly fixed costs are $12,000 per month. The unit selling price is $85 and variable cost per unit is $45. How many units should Aspen sell in order to earn $10,000 as operating income?
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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wrote...
#1
5 years ago
 Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit
Unit contribution margin = Net sales revenue per unit - Variable costs per unit

Selling price$85
Less: variable cost(45)
Contribution margin40
Fixed costs12,000
Target profit10,000
Required sales in units ($22,000 / $40)550 units
tftc4e Author
wrote...
#2
5 years ago
Makes more sense now, have a good weekend!
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