10) Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of varia

Question

10) Sky High sells helicopters. During the current year, 130 helicopters were sold resulting in $840,000 of sales revenue, $260,000 of variable costs, and $350,000 of fixed costs. The number of helicopters that must be sold to achieve $320,000 of operating income is ________. A) 151 units B) 104 units C) 79 units D) 130 units

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Maria 2 weeks 2021-09-12T23:52:10+00:00 1 Answer 0

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    2021-09-12T23:53:46+00:00

    Answer: A) 151 units

    Step-by-step explanation:

    We would apply the formula which is expressed as

    N = (FC + OP)/[(R – VC)/TU]

    Where

    N represents the number of helicopters that must be sold.

    FC represents the fixed cost

    OP represents the operating income required.

    R represents revenue

    VC represents variable cost

    TU represents the total number of units sold.

    From the information given

    FC = 350000

    OP = 320000

    R = 840000

    VC = 260000

    TU = 130

    Therefore,

    N = (350000 + 320000)/[(840000 – 260000)/130]

    N = 670000/4461.54

    N = 151 units rounded up to the nearest whole number

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