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

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.)

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