SOLUTION: a company produces product A for which variable cost (including labour and material) is $60 per unit. Fixed costs for the company is $800,000. Each unit of the product sells for $1

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Question 696946: a company produces product A for which variable cost (including labour and material) is $60 per unit. Fixed costs for the company is $800,000. Each unit of the product sells for $100. Determine the number of units which must be sold for the company to earn a profit of $600,000
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
Profit during a period = ( income from sales ) - ( total costs of production )
Let +P+ = profit
Let +n+ = number of units sold
+P+=+100n+-+60n+-+800000+
+P+=+40n+-+80000+
+P+=+600000+
+600000+=+40n+-+80000+
+40n+=+600000+%2B+80000+
+40n+=+680000+
+n+=+17000+
17,000 units must be sold must be sold for the
company to earn a profit of $600,000