If the fixed cost is $20000, the target operating income is $10000 and the contribution margin per unit is $1200 then required units to be sold will be __________?
Correct answer: D. 25 units
- A. 55 units
- B. 45 units
- C. 35 units
- D. 25 units
Explanation
Required units equal fixed cost plus target operating income, divided by contribution margin per unit: ($20,000 + $10,000) ÷ $1,200 = 25 units.
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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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