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Managerial Accounting

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Moderate

Units for Each of Three Products

MGRACT-4ZXAUZ

​A company sells three products, as follows: 3 units of A for each unit of C, and 2 units of B for each unit of A.

The per unit contribution margins are \$2, \$6, and \$9 for A, B, and C, respectively.

​Fixed costs are \$950,000 and the target pretax profit is \$40,000.

The number of units of A, B, and C needed to be sold to achieve the target profit would be:

A

$\text{A = 58,235; B = 116,470; C = 19,412}$

B

$\text{A = 30,938; B = 15,469; C = 92,814}$

C

$\text{A = 24,146; B = 48,292; C = 72,438}$

D

$\text{A = 123,750; B = 61,875; C = 41,250}$