The fixed cost is added to target operating income and then divided to contribute margin per unit to calculate _________?
Correct answer: D. quantity of units required to sold
- A. contributed units
- B. selling of units
- C. sold units
- D. quantity of units required to sold
Explanation
Required unit sales are calculated as (fixed cost + target operating income) ÷ contribution margin per unit. This determines the number of units needed to cover fixed costs and achieve the target profit.
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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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