please provide an explanation CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION

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CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 1 Incorrect Net Income Planning $10 0.0 points out of 3,.00 P Flag question Nolden Company has charged a selling price of $20 per unit, incurred variable costs of $10 per unit, and total fixed costs of 5,000. What unit sales volume is nec essary to earn the following related amounts of net income before income tax2 (a) $18,000; (b) $27,000, or (c) equal to 20% of sales revenue. (a) 1,125 units (b) 2,700units (c) 21,000 units Check You have correctly selected 0 Incorrect Marks for this submission: 0.00/3.00.

Explanation / Answer

Ans)

a) 18000

Units = (Fixed cost + Target profit) / cont. per unit

= 105,000 + 18000 / 20 - 10

= 12,300 units

b) 27000

= 105000 + 27000 / 10

= 13,200 Units

c) Equal to 20% of sales revenue

Units (X) = (Fixed cost + Target profit) / Cont. per unit

X = (105,000 + 20% x units X 20) / 20 -10

X = 105000 + 4X / 10

10X = 105000 + 4X

6X = 105,000

X = 105,000 / 6

X = 17,500 Units

  

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