Palms, Inc. wants to sell enough palm trees to earn a profit of $20,000. If the unit sales price is $40, unit variable cost is $22, and total fixed costs are $120,400, how many trees must be sold to earn a profit of $20,000?a. 6,689. b. 312,000.
c. 7,800.
d. 8,911.

c. 7,800

Explanation:

Contribution margin per tree = Unit selling price - Unit variable cost = $40 - $22 = $18

Sales(trees) required = (Fixed costs+Operating income) / Contribution margin per tree = ($120,000+$20,000) / $18 = $140,000 / $18 = 7,800 trees

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