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Ocean City Kite Company sells kites for $10.00 per kite. In FY 2019, total fixed costs...

Ocean City Kite Company sells kites for $10.00 per kite. In FY 2019, total fixed costs are expected to be $235,000 and variable costs are estimated at $3.50 a unit. Ocean City Kite Company wants to have a FY 2019 operating income of $70,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal. (Round your answer to a whole number)

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Answer #1
Contribution Margin Per Unit = Sales price - variable cost per unit
= $10-3.5
= $6.5 per unit
Number of units need to be sold for proft $70000
= (Desired profit + Fixed cost)/ contribution margin per unit
= ($70000 + $235000) /6.5
=$305000/6.5
=46924 units
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