Respuesta :
Answer:
40,000 units
Explanation:
We can proceed as follows:
CMA = Contribution margin of A = $100 - $60 = $40
CMB = Contribution margin of B = $70 - $50 = $20
Unit of A sold with B = 1
Unit of B sold with A = 3
Unit of A and B sold together at a time = 1 + 3 = 4
WA = Weight of A in the sales combination = 1/4
WB = Weight of B in the sales combination= 3/4
Weighted average unit contribution margin = (CMA × WA] + (CMB × WB)
= ($40 × 1/4) + (20 × 3/4)
= $10 + $15
Weighted average unit contribution margin = $25
Target units = (Fixed cost + Targeted profit) ÷ Weighted average unit contribution margin
= ($750,000 + $250,000) ÷ $25
= $1,000,000 ÷ 25
Target units = 40,000 units.
Therefore, Friar would have to sell 40,000 units to earn a profit of $250,000.
Note:
Note that the 40,000 units are for products A and B and it can be divided for them based on their weights as follows:
Units of Product A = 40,000 × 1/4 = 10,000 units
Units of Product B = 40,000 × 3/4 = 30,000 units.
The number of units that Friar have to sell to earn a profit of $250,000 is 40,000 units
Calculation of the number of units:
But before that we have to determine weighted average contribution margin units:
= (100 -60) * 1/4 + (70 - 50) * 3/4
= $10 + $15
= $25
Now the number of units should be
= ($750,000 + $250,000) / $25
= $1,000,000 / $25
= 40,000 units
Hence, The number of units that Friar have to sell to earn a profit of $250,000 is 40,000 units
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