How many units will the company have to sell

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Question - The 21405-TH company sells its product for $25 per unit. The variable expenses are $15 per unit. The 21405-TH company sold 56,000 units last year and reported the following results:

Sales (56,000 balls) $1,400,000

Variable expenses 840,000

Contribution margin 560,000

Fixed expenses 373,000

Net operating income $187,000

The 21405-TH company considers reducing variable expenses per unit by 40% by investing in new equipment that would double the company's fixed expenses. If the new equipment is purchased, how many units will the 21405-TH company have to sell next year to earn the same net operating income, $187,000, as last year?

Reference no: EM133150062

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