If a company has a contribution margin of $30 per unit and fixed costs of $12,00

₹0.0

📥 Instant PDF Download
♾ Lifetime Access
🛡 Secure & Original Content

What’s inside this PDF?

Question: If a company has a contribution margin of $30 per unit and fixed costs of $12,000, how many units must be sold to achieve a target profit of $3,000?

Options:

500 units
600 units
400 units
700 units

Correct Answer: 600 units

Solution:

Required Sales = (Fixed Costs + Target Profit) / Contribution Margin per Unit = ($12,000 + $3,000) / $30 = 500 units.

If a company has a contribution margin of $30 per unit and fixed costs of $12,00

Practice Questions

If a company has a contribution margin of $30 per unit and fixed costs of $12,000, how many units must be sold to achieve a target profit of $3,000?

500 units
600 units
400 units
700 units

Questions & Step-by-Step Solutions

If a company has a contribution margin of $30 per unit and fixed costs of $12,000, how many units must be sold to achieve a target profit of $3,000?

Step 1: Identify the contribution margin per unit, which is given as $30.
Step 2: Identify the fixed costs, which are given as $12,000.
Step 3: Identify the target profit, which is given as $3,000.
Step 4: Add the fixed costs and the target profit together: $12,000 + $3,000 = $15,000.
Step 5: Divide the total from Step 4 by the contribution margin per unit: $15,000 / $30.
Step 6: Calculate the result from Step 5, which equals 500 units.

Contribution Margin – The amount each unit contributes to covering fixed costs and generating profit.
Fixed Costs – Costs that do not change with the level of production or sales.
Target Profit – The desired profit level that the company aims to achieve.
Break-even Analysis – A calculation to determine the number of units that must be sold to cover costs and achieve a profit.

If a company has a contribution margin of $30 per unit and fixed costs of $12,00

What’s inside this PDF?

If a company has a contribution margin of $30 per unit and fixed costs of $12,00

Practice Questions

Questions & Step-by-Step Solutions

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?