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Bidwe has a single product which sells for $155 per unit. Its variable expense per unit...

Bidwe has a single product which sells for $155 per unit. Its variable expense per unit is $91 and the company’s fixed expenses are $427,940 per month. What would the number of units sold have to be in order to meet the company’s monthly target profit of $18,000?

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Answer #1

BEP units = Fixed cost + Target profit / Contribution margin per unit

Fixed cost = $427,940

Target profit = $18,000

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

                                        = $155 - $91

Contribution margin per unit = $64

Bep units = 427,940 + 18,000 / 64

               = 445,940 / 64

Bep units = 6967.81 (or) 6968units

So Bidwe has to sell minimum 6967.81units in order to get desire profit of $18,000

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