Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan Company management targets an annual pre-tax income of $1,125,000. Compute the unit sales to earn the target pre-tax net income.
A) 4,444.
B) 7,500.
C) 6,650.
D) 10,694.
E) 11,750.
D) 10,694.
Explanation: $450 – $270 = $180; ($800,000+ $1,125,000)/$180 = 10,694 units
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