Answer:
15,000 units
Explanation:
In this question we use the formula of break-even point in unit sales which is shown below:
= (Fixed expenses + target profit) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
The selling price is $25 - $2 = $23
And, the variable expense per unit would be = $25 × 60% = $15
So, it would be $23 - $15 = $8
We know that
Operating profit = Sales - variable cost - fixed cost
$20,000 = $300,000 - $180,000 - fixed cost
So, the fixed cost would be
= $100,000
And, the sales would be
= Variable cost × 100 ÷ variable cost ratio
= $180,000 × 100 ÷ 60
= $300,000
And, the other items values would remain the same
Now put these values to the above formula
So, the value would equal to
= ($100,000 + $20,000) ÷ ($8)
= ($120,000) ÷ ($8)
= 15,000 units
