Question

Betty DeRose, Inc. produces and sells three products. Information about these products for 2022, the most recent year, appears below: Product A Product B Product C selling price per unit $33 $49 $24 variable costs per unit $14 $37 $11 number of units sold 22,000 18,000 25,000 Betty DeRose, Inc. reported total fixed costs of $195,636 in 2022. Calculate the number of units of Product B that needed to be sold in 2022 in order for Betty DeRose, Inc. to earn a net income of $498,680.

Answer 1

Present Net Income.

Particulars	A	B	C
A) Selling price per unit	$33	$49	$24
B) Variable Cost per unit	$14	$37	$11
C) Contribution per unit (A-B)	$19	$12	$13
D) Units sold	22,000	18,000	25,000
E) Total Contribution (C*D)	$418,000	$216,000	$325,000

Total Contribution = $959,000
Less: Total Fixed costs = $195,636
Net Income = $ 763,364

Require Net Income = $498,680
Fixed Costs = $195,636
Total Contribution required= $498,680+$195,636= $694,316
Contribution per unit (B) = $12
Hence Total units of B required to be sold = ($694,316/$12) = 57,860 (Rounded to nearest whole)