Answer:
The sales level in units to achieve the desire profit is "12,500".
Explanation:
variable cost = $6 per unit
fixed costs = $30,000
product sells = $10 per unit
profit = $20,000
we will calculate the sales level in units to achieve the desire profit by adding the fixed cost and profit and then dividing it by the subtraction of fixed cost from products sale per unit price;
=($30,000 + $20,000)/($10-$6)
= 12,500
Based on the variable cost, the fixed costs, and the desired profit, the sales level in units required is 12,500 units.
This can be found by the formula:
= (Fixed costs + Desired profit) / (Selling price - variable cost)
Solving gives:
= (30,000 + 20,000) / (10 - 6)
= 50,000 / 4
= 12,500 units
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