Young Guns Company, which sells tents, has provided the following information
Sales price per unit $45
Variable cost per unit 11
Fixed costs per month $12,700
What are the required sales in units for Young to break even? (Round your answer up to the nearest whole unit.)
A) 227 units
B) 1,155 units
C) 283 units
D) 374 units
D .D) Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit
Unit contribution margin = Net sales revenue per unit - Variable costs per unit
Sales price $45
Less: variable cost (11 )
Contribution margin $34
Required sales in units = ($12,700 + $0 ) / $34 = 374 units
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