Answer:
Burkett Corporation
The number of units that must be sold in order to achieve a target pretax income of $165,900 is:
= 54,042 units.
Explanation:
a) Data and Calculations:
Total Per Unit
Sales (47,000 units) $987,000 $21.00
Costs:
Direct materials $209,400
Direct labor 241,300
Variable factory overhead 151,300
Variable marketing costs 51,300
Total variable costs $653,300 $13.90
Contribution margin $333,700 $7.10 ($21 - $13.90)
Fixed factory overhead 106,500
Fixed marketing costs 111,300
Total fixed costs $217,800
Pretax income $115,900 165,900
To achieve a target profit of $165,900, units that must be sold
= (Total fixed costs + Target profit)/Contribution margin per unit
= ($217,800 + $165,900)/$7.10
= $383,700/$7.10
= 54,042 units
