Kindly help me Accounting question ABC Manufacturing has a unit selling price of $25, unitvariable costs of $15, fixed costs of $30,000, and wants toachieve a profit of $50,000. How many units must thecompany sell to reach this profit target?A. 5,000B. 8,000C. 10,000D. 12,000

Step 1: Definition of Break-Even and Target Profit AnalysisBreak-even and target profit analysis…

Answered: ABC Manufacturing has a unit selling…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
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ABC Manufacturing has a unit selling price of $25, unit variable costs of $15, fixed costs of $30,000, and wants to achieve a profit of $50,000. How many units must the company sell to reach this profit target? A. 5,000 B. 8,000 C. 10,000 D. 12,000