Question

The following data are for Lily Kay Company. Total sales revenue $250,000 Number of units sold 50,000 units Contribution margin per unit $3.50 Fixed costs $100,000 Calculate the number of units that must be sold to generate net income of $80,000.

Answer 1

the number of units that generated net income is 51,429 units

Step-by-step explanation:

The computation of the number of units that generated net income is shown below:

Here we have to find the break even point i.e. shown below:

= (Net income + fixed cost) ÷ (contribution margin per unit)

= ($80,000 + $100,000) ÷ ($3.50)

= 51,429 units

hence, the number of units that generated net income is 51,429 units and the same is to be considered