Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, andfixed costs total $60,000. How many MP3 players must Cunningham sell to earn netincome of $140,000?

Question

Moises

Business

2 July, 01:48

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, andfixed costs total $60,000. How many MP3 players must Cunningham sell to earn netincome of $140,000?

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Answers (1)

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Leonardo Ramsey · Answer 1

Cunningham, Inc. must sell 10,000 MP3

Explanation:

Giving the following information:

Cunningham, Inc. sells MP3 players for $60 each.

Variable costs are $40 per unit.

Fixed costs total $60,000.

Net income = 140,000

We need to use the break-even formula:

break-even (units) = (fixed costs + net income) / (selling price - variable costs)

break-even (units) = (60000 + 140000) / (60 - 40) = 10000 units