19 Santa Fe Electronics sells flat panel televisions. The average selling price

Question

19 Santa Fe Electronics sells flat panel televisions. The average selling price of the TV is $970. The TVs are Popurchased from manufacturers at an average purchase cost of $680 per unit, which includes shipping. Sin customers pick-up TVs directly from the shop, the company pays no delivery charge. Sales people are paid a fixed salary plus a commision of S40 per unit. All selling and administrative expenses, including the salaries, are fixed at a total of $58,000 per month. In order to increase their sales, the company has decided to increase the unit commission to $60 for every TV sold above the break-even point. How many units of TVs does the company need to sell in order to earn a net operating income of S9,200 per month (round all decimal up to one unit)? 293 units 280 units 272 units 234 units D. E. None of the above 32 20 o

Explanation / Answer

Units sold×(Sale price-Purchase cost-Commission)-Fixed costs = $9,200

Units sold×($970-$680-$60)-$58,000 = $9,200

Units sold = $67,200/$230

Units sold = 293

Hence, correct option is (A) 293 units

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