If fixed costs are 60,000; required profit 15,000; and contribution per unit is 5, what is the required sales volume?

If fixed costs are 60,000; required profit 15,000; and contribution per unit is 5, what is the required sales volume?

• A. 15000
• B. 10000
• C. 7500
• D. 12500

Answer: (A)

Determining the sales volume needed to cover fixed costs and achieve the target profit using contribution per unit. To meet fixed costs plus the desired profit, you need a total contribution of fixed costs plus profit: 60,000 + 15,000 = 75,000. With a contribution per unit of 5, each unit adds 5 toward that total, so required units = 75,000 ÷ 5 = 15,000. Therefore, the required sales volume is 15,000 units. The other numbers would not reach the 75,000 total contribution.

Determining the sales volume needed to cover fixed costs and achieve the target profit using contribution per unit.

To meet fixed costs plus the desired profit, you need a total contribution of fixed costs plus profit: 60,000 + 15,000 = 75,000. With a contribution per unit of 5, each unit adds 5 toward that total, so required units = 75,000 ÷ 5 = 15,000.

Therefore, the required sales volume is 15,000 units. The other numbers would not reach the 75,000 total contribution.