EXERCISE 6-17 (30 MINUTES)

3. Sales = Variable expenses + Fixed expenses + Profits

$25Q = $18Q + $210,000 + $90,000

$7Q = $300,000

Q = $300,000 ÷ $7 per ball

Q = 42,857 balls (rounded)

Alternative solution:

Fixed expenses +Target profit

Unit sales to attain= target profit Unit contribution margin

$210,000 + $90,000

= =42,857 balls

$7 per ball

Thus, sales will have to increase by 12,857 balls (42,857 balls, less