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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Based on the data presented in Question 3, how many units of sales would he required lo realize operating income of $20,000?
A. 11,250 units
B. 35,000 units
C. 40,000 units
D. 45.000 units

To determine

Concept Introduction:

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

  Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit) 

To Calculate:

The Sales Units required realizing the desired profit

Explanation

The Sales Units required realizing the desired profit is calculated as fo...

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