Question

# Betsy Company sells a single product. They want to make a profit of \$60,666 Unit Variable...

Betsy Company sells a single product.

They want to make a profit of \$60,666

Unit Variable costs = \$13

Unit selling price is = \$22

Fixed costs = \$18,082

How many units do they need to sell to make the desired profit?

Round your units UP to the nearest whole number.

Computation of number of units to sale to make profit of \$ 60,666

Required Sales unit = (Fixed cost + Desired profit) / Contribution margin per unit

= ( \$ 18,082 + \$ 60,666 ) / \$ 9

= 8,750 units ( Rounded off to nearest whole number as per question requirement)

Thus, Betsy company needs to sale 8,750 units in order to make profit of \$ 60,666

Working note:

Calculation of contribution margin per unit:

Contribution margin per unit = Selling price per unit - Variable cost per unit

=\$ 22 - \$ 13

= \$ 9

Note:

We can prove at 8,750 unit profit will be \$ 60,666

Profit = Total contribution margin - Fixed cost

= \$ 78,750 - \$ 18,082

= \$ 60,668 ( answer is nearest to \$ 60,666 & vary due to rounding off number of units to nearest whole number)

Total contribution margin = Number of units * Contribution margin per unit

= 8,750 * \$ 9

= \$ 78,750

#### Earn Coins

Coins can be redeemed for fabulous gifts.