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10 May, 03:46

An entity has decided to focus strictly on producing and selling one type of teddy bear. For the upcoming year, the entity hopes to make a 25% profit on sales. Fixed costs are set at $51,000, and variable costs are $9.50 per unit. If teddy bears are sold at $15 each, how many bears must be sold to meet the profit goal?

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  1. 10 May, 03:57
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    29,143

    Explanation:

    Profit target = 25% on sales

    Fixed cost = $51,000

    Variable cost = $9.50 per unit

    Sales price per unit = $15

    To achieve profit target, let the number of units sold be y

    Total sales = 15y

    Total variable cost = 9.5y

    Profit = 0.25 * 15y

    = 3.75y

    Sales - Cost = profit

    15y - (51000 + 9.5y) = 3.75y

    15y - 9.5y - 3.75y = 51000

    1.75y = 51000

    y = 51000/1.75

    y = 29143

    29,143 bears must be sold to meet the profit goal.
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