Question & Answer: Lin Corporation has a single product whose selling price is $140 and whose variable expense is $70 per unit. The company'…..

[The following Information applles to the questions displayed below Lin Corporation has a single product whose selling price is $140 and whose variable expense is $70 per unit. The companys monthly fixed expense is $31,600. 2. Usin g the formula method, determine for the unit sales that are required to earn a target profit of $10,000. (Round up your answer to the nearest whole number.) Unit sales

Lin Corporation has a single product whose selling price is $140 and whose variable expense is $70 per unit. The company’s monthly fixed expense is $31, 600. Using the formula method, determine for the unit sales that are required to earn a target profit of $10,000. (Round up your answer to the nearest whole number.)

Expert Answer

Required Target Profit = $ 10,000

Add: Fixed Expenses = $ 31,600

Required Contribution = $ 41,600

Contribution Per Unit = Sales – Variable Cost

= $ (140- 70)

= $ 70

Hence, the Number of Units required = Required Contribution / Contribution Per Unit

= $ 41,600 / $ 70

= 594.29

= 594

Hence, the correct answer is 594

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