McGovern Electronics at its current sales level of 2,000 units achieves a net income of $10,000....

 

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McGovern Electronics at its current sales level of 2,000 units achieves a net income of $10,000. The firm sells its TVs for $200 and its variable costs are 80% of sales. Fixed costs are $70,000. Problem: 1. How many more units need to be sold to achieve a net income of $25,000? 2. How much more revenue needs to be generated to achieve a net income of $25,000? McGovern Electronics at its current sales level of 2,000 units achieves a net income of $10,000. The firm sells its TVs for $200 and its variable costs are 80% of sales. Fixed costs are $70,000. Problem: 1. How many more units need to be sold to achieve a net income of $25,000? 2. How much more revenue needs to be generated to achieve a net income of $25,000?

Answer rating: 100% (QA)

To solve the problem we need to calculate the contribution margin per unit and use it to determine t... View the full answer