A company has fixed costs of $320,000 and a contribution margin per unit of $15. If the company wants to earn a target $40,000 pretax income, how many units must be sold (rounded to the nearest whole unit)? Multiple Choice 24,000. 21,333. 18,666. 2,667. 20,000.

24,000

Explanation:

The pretax income is the difference between the company's sales and total expense. The total expense is made up of the fixed and variable expense. The difference between the sales and variable expense gives the contribution margin.

The difference between sales and variable expense gives the contribution margin. While the contribution margin less fixed cost gives the pretax income.

Let the number of units to be sold be y

15y - $320,000 = $40,000

15y = $320,000 + $40,000

15y = $360,000

y = 24,000 units

answer; the correct answer to the above statement is (true);