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19 June, 21:40

If fixed costs are $1,291,000, the unit selling price is $238, and the unit variable costs are $105, what is the amount of sales in units (rounded to a whole number) required to realize an operating income of $217,000? a. 5,424 unitsb. 11,338 unitsc. 2,067 unitsd. 12,295 units

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  1. 19 June, 21:46
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    b. 11,338 units

    Explanation:

    The computation of the amount of sales in units is shown below:

    Let us assume the amount of sales in units is X

    So, the equation is

    Profit = Sales - Variable Expenses - Fixed Cost

    where,

    Profit = $217,000

    Sales = $238 * X

    Variable expense = $105 * X

    And, the fixed cost is $1,291,000

    So, the sales in units is

    $217,000 = $238 * X - $105 * X - $1,291,000

    $1,508,000 = $238 * X - $105 * X

    $1,508,000 = $133 * X

    So, the X = 11,338 units
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