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?
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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