Question

Data concerning Bedwell Enterprises Corporation's single product appear below: Selling price per unit $ 190.00 Variable expenses per unit $ 94.50 Fixed expense per month $ 438,790 The unit sales to attain the company's monthly target profit of $25,000 is closest to: (Do not round intermediate calculations.)

Answer 1

Answer:

Target sales unit = 4,856 units

Explanation:

We know,

Target sales unit = (Fixed expense + Target profit) ÷ (Sales price per unit - Variable expense per unit)

Given,

Fixed expense = $438,790

Sales price per unit = $190.00

Target profit = $25,000

Variable expense per unit = $94.50

Putting the values into the above formula,

Target sales unit = ($438,790 + $25,000) ÷ ($190.00 - 94.50)

or, Target sales unit = $463,790 ÷ $95.50

Therefore, Target sales unit = 4,856 units