The Smith Company management would like to know the total sales units that are required for the company to earn a profit of 150,000 . The following data are available: unit selling price of 50 variable cost per unit of 25 total fixed cost of 500,000 From these data , determine the required sales units. ou try

To determine the required sales units for the Smith Company to earn a profit of $150,000, we can use the following formula:<br /><br />\[ \text{Required Sales Units} = \frac{\text{Total Fixed Cost} + \text{Desired Profit}}{\text{Unit Selling Price} - \text{Variable Cost per Unit}} \]<br /><br />Given:<br />- Unit selling price = $50<br />- Variable cost per unit = $25<br />- Total fixed cost = $500,000<br />- Desired profit = $150,000<br /><br />Plugging in the values:<br /><br />\[ \text{Required Sales Units} = \frac{500,000 + 150,000}{50 - 25} \]<br /><br />\[ \text{Required Sales Units} = \frac{650,000}{25} \]<br /><br />\[ \text{Required Sales Units} = 26,000 \]<br /><br />Therefore, the Smith Company needs to sell 26,000 units to earn a profit of $150,000.