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I need detailed help with steps on how to solve: Smoothlt Inc is facing a problem with their 4th quarter absorption costing net operating income on December 23rd. The net operating income target is $2,000,000 and the data so far is as follows: Sales Revenue: $25,000,000 ($500 per unit) Variable Cost of Goods Sold: $10,000,000 ($200 per unit) Fixed Overhead : $12,000,000 Fixed Selling and Adminstrative : $2,000,000 Variable Selling and Admin : 4% commission on sales Smoothlt has a policy of having 0 inventories at the end of each quarter. No further sales are possible during the year and all the units that have been produced so far have been sold. The CEO is planning to produce items for inventory to meet net operating income target . Question: How many units need to be produced for inventory to meet net operating income target if sales commission is left unchanged at 4% ? A) 4,054 B) 30,000 C) 10,000 D) 15,000 E) None Thanks! Training

I need detailed help with steps on how to solve: Smoothlt Inc is facing a problem with their 4th quarter absorption costing net operating income on December 23rd. The net operating income target is $2,000,000 and the data so far is as follows: Sales Revenue: $25,000,000 ($500 per unit) Variable Cost of Goods Sold: $10,000,000 ($200 per unit) Fixed Overhead : $12,000,000 Fixed Selling and Adminstrative : $2,000,000 Variable Selling and Admin : 4% commission on sales Smoothlt has a policy of having 0 inventories at the end of each quarter. No further sales are possible during the year and all the units that have been produced so far have been sold. The CEO is planning to produce items for inventory to meet net operating income target . Question: How many units need to be produced for inventory to meet net operating income target if sales commission is left unchanged at 4% ? A) 4,054 B) 30,000 C) 10,000 D) 15,000 E) None Thanks! Training

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need detailed help with steps on how to solve: Smoothlt Inc is facing a problem with their 4th quarter absorption costing net operating income on December 23rd. The net operating income target is $2,000,000 and the data so far is as follows: Sales Revenue: $25,000,000 ($500 per unit) Variable Cost of Goods Sold: $10,000,000 ($200 per unit) Fixed Overhead : $12,000,000 Fixed Selling and Adminstrative : $2,000,000 Variable Selling and Admin : 4% commission on sales Smoothlt has a policy of having 0 inventories at the end of each quarter. No further sales are possible during the year and all the units that have been produced so far have been sold. The CEO is planning to produce items for inventory to meet net operating income target . Question: How many units need to be produced for inventory to meet net operating income target if sales commission is left unchanged at 4% ? A) 4,054 B) 30,000 C) 10,000 D) 15,000 E) None Thanks! Training
Transcribed Image Text:I need detailed help with steps on how to solve: Smoothlt Inc is facing a problem with their 4th quarter absorption costing net operating income on December 23rd. The net operating income target is $2,000,000 and the data so far is as follows: Sales Revenue: $25,000,000 ($500 per unit) Variable Cost of Goods Sold: $10,000,000 ($200 per unit) Fixed Overhead : $12,000,000 Fixed Selling and Adminstrative : $2,000,000 Variable Selling and Admin : 4% commission on sales Smoothlt has a policy of having 0 inventories at the end of each quarter. No further sales are possible during the year and all the units that have been produced so far have been sold. The CEO is planning to produce items for inventory to meet net operating income target . Question: How many units need to be produced for inventory to meet net operating income target if sales commission is left unchanged at 4% ? A) 4,054 B) 30,000 C) 10,000 D) 15,000 E) None Thanks! Training
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