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How many additional units should have been sold

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Question - Total production costs of prior periods for a company are listed as follows. Assume that the same cost behavior patterns can be extended linearly over the range of 3,000 to 35,000 units and that the cost driver for each cost is the number of units produced.

Production in units per month 3,000 9,000 16,000 35,000

Cost X $23,700 $ 52,680 $ 86,490 $178,260

Cost Y 47,280 141,840 252,160 551,600

The company is concerned about its current operating performance that is summarized as follows.

Sales ($12.50 per unit) $300,000

Variable costs 180,000

Net operating loss (40,000)

Required - How many additional units should have been sold in order for the company to break even?

Reference no: EM132830861

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