Bravo Company sells Widgets at $7 a unit. In FY 2016, fixed costs are expected to be $200,000 and variable costs are estimated to increase from $3 per unit to $4 a unit. Bravo wants to have a FY 2016 operating income of $40,000. Use this information to determine the number of units of Widgets that Bravo must sell in FY 2016 to meet this goal. (Round any total dollar value to the nearest whole dollar & enter as whole dollars only. Round any unit dollar value to the nearest penny & enter with both dollar(s) & cents. Round any unit non-dollar decimal numbers to the next higher whole number and enter as a whole number.)
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Question & Answer: Bravo Company sells Widgets at $7 a unit. In FY 2016, fixed costs are expected to be $200,000 an…..
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|Number of units of Widgets = (Fixed costs+Operating income)/Unit contribution margin|