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28 September, 11:40

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, andfixed costs total $60,000. How many MP3 players must Cunningham sell to earn netincome of $140,000?

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  1. 28 September, 15:24
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    Cunningham, Inc. must sell 10,000 MP3

    Explanation:

    Giving the following information:

    Cunningham, Inc. sells MP3 players for $60 each.

    Variable costs are $40 per unit.

    Fixed costs total $60,000.

    Net income = 140,000

    We need to use the break-even formula:

    break-even (units) = (fixed costs + net income) / (selling price - variable costs)

    break-even (units) = (60000 + 140000) / (60 - 40) = 10000 units
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Home » Business » Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, andfixed costs total $60,000. How many MP3 players must Cunningham sell to earn netincome of $140,000?
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