Locus Company Has Total Fixed Costs of $112,000

question 153

Multiple Choice

Locus Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Locus Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?

• A) 14,080.
• B) 11,200.
• C) 12,320.
• D) 1,120.
• E) 8,214.