If target operating income is $38000, contribution margin per unit is $400, then the number of units must be sold to earn targeted operating income will be ___________?
Correct answer: C. 95 units
- A. 65 units
- B. 75 units
- C. 95 units
- D. 85 units
Explanation
Required units equal target operating income divided by contribution margin per unit: $38,000 ÷ $400 = 95 units. This assumes no separate fixed-cost amount is included in the target calculation.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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