Find how many units would abc inc sell in order to earn

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Reference no: EM132528679

Selling price per unit (package of 2 CDs)......................................$20.00

Variable costs per unit:

Direct material...............................................................................................................$4.00

Direct labor......................................................................................................................$5.00

Artist's royalties..............................................................................................................$3.50

Manufacturing overhead..........................................................................................$3.00

Selling expenses............................................................................................................$1.00

Total variable costs per unit............................................................$16.50

Annual fixed costs:

Manufacturing overhead..........................................................................................$180,000

Selling and administrative.......................................................................................$220,000

Total fixed costs................................................................................$400,000

Forecasted annual sales volume (120,000 units).........................$2,400,000

Question 1: How many units would ABC Inc. have to sell in order to earn operating income of $260,000?

Reference no: EM132528679

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