The selling price of Old Corporation's only product is $180.00 per unit and its variable expense is $37.80 per unit. The company's monthly fixed expense is $483,480. Required: Assume the company's monthly target profit is $56,880. Determine the unit sales to attain that target profit.
What will be an ideal response?
| Selling price per unit | $ | 180.00 |
| Variable expense per unit | 37.80 | |
| Contribution margin per unit | $ | 142.20 |
Unit sales to attain target profit = (Target profit + Fixed expenses) ÷ Unit CM
= ($483,480 + $56,880) ÷ $142.20 per unit = 3,800 units
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