EXERCISE 6-13 (CONTINUED)

4. Sales = Variable expenses + Fixed expenses + Profits

$45Q = $32Q + $108,000 + $35,000

$13Q = $143,000

Q = $143,000 ÷ $13 per stove

Q = 11,000 stoves

Alternative solution:

Fixed expenses + Target profit

Unit sales to attain = target profit Unit contribution margin

$108,000 + $35,000

= = 11,000 stoves

$13 per stove