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Target Net Profits

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A recent income statement of the Norwood Corporation reported the following data:
Units sold 8700
Sales revenue $7,200,000
Variable costs 4,000,000
Fixed costs 1,700,000

If Norwood desires to earn a target net profit of $480,000, how many units would it have to sell?

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Solution Summary

This solution shows step-by-step calculations to determine how many units Norwood Corporation would have to sell to attain a profit of $480,000.

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For a target net profit units to be sold = (Fixed cost + target net profit)/unit ...

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