Question

# Comfort Bach Inc. Comfort Bach Inc. produces office chairs for the US markets. The price of...

Comfort Bach Inc.

Comfort Bach Inc. produces office chairs for the US markets. The price of the chair is \$109.75 and the variable cost per chair is \$49.75. The following fixed costs are incurred:

Depreciation of plant and equipment per year \$20,000

Property taxes per year \$22,000

Manager's salary and fringe benefits per month are \$4,200

Comfort Bach Inc.

Utilizing the information from the previous question above, how many chairs must be sold for the company to make a net profit of \$75,000 in a year (ROUND UP NUMBER OF CHAIRS)?

A 1,250

B 2,957

C 2,283

D 2,790

Number of chairs = (Fixed costs+ Target Profit) / (Selling Price per unit - Variable Cost per unit)

Fixed cost = 20000+22000+(4200*12)

= 92400

Number of chairs = (92400+75000)/109.75-49.75

= 167400/60

= 2790

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