Lin Corporation has a single product whose selling price is 120 and whose variable expense is 80 per unit. The company's monthly fixed expense is 50,000 .
(a) Using the equation method, solve for the unit sales that are required to earn a target profit of 10,000

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shubhamsinha3013 shubhamsinha3013 · Answer 1 · 2022-08-27T14:43:58+02:00

Using the equation method, the unit sales that are required to earn a target profit of 10,000 are 1500 units.

given information:

selling price = $120 per unit

variable expense = 80 per unit

monthly fixed expenses = $50,000

And target profit = $10,000

Assuming 'x' is the units sold to achieve the target profit of $10,000

Using the equation method,

Sales = variable expense + fixed expense + target profit

Now, substituting the given values in the above equation we get,

120x = 80x + $50000 + $10000

120x = 80x + $60000

120x - 80x = $60000

40x = $60000

x = $60000/40

x = 1500 units

Hence, 1500 units are required to earn a target profit of 10,000.

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