7 Our company makes and sells bicycles. We never hold inventories. Last year, ou

Question

7 Our company makes and sells bicycles. We never hold inventories. Last year, our net operating income (NOI) was $800,000, The following additional information is available about last year: Amount 36,000 135 76 Units Sold Unit Selling Price Product Cost per Unit (under GAAP) Fixed Manufacturing Overhead Variable Selling and Administrative Cost per S 1,440,000 Approximately how many units would we need to sell to earm the NOI of $1,600,0007 A. B. C. D. 45,756 72,000 37,073 72,381 E. None of the above

Explanation / Answer

The correct option is (D) i.e. 72,381 Let the units sold to be "X" Sales = 135X Product cost per unit = 76X Variable selling and Administrative cost per unit = 17X Fixed Manufacturing overhead = 1,440,000 Net operating income = 1,600,000 Now, 135X-76X-17X-1,440,000 = 1,600,000 = 42X = 1,600,000+1,440,000 = 42X = 3,040,000 = X = 3,040,000/42 = X = 72,381

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.