Washington Bottling Company provides the following information about its single product
Targeted operating income $659,930
Selling price per unit $7.55
Variable cost per unit $5.55
Total fixed cost $112,200
How many units must be sold to earn the targeted operating income?
A) 329,965
B) 56,100
C) 58,941
D) 386,065
D
Explanation: D)
Sales $7.55
Less Variable costs 5.55
= Contribution Margin $2.00
Fixed expenses $112,200 + Target Income $659,930 = $772,130 divided by Contribution Margin $2.00 = 386,065 BE units
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