Problem - Chuck's Trucks, Inc. manufactures radio-controlled toy trucks. The CFO has determined that the company needs to have monthly profits of $26,000 in order to pursue growth opportunities into new product lines. She has asked you to calculate how many units Chuck's must sell to meet this target.
Chuck's April production activity information is provided below.
Chuck's Trucks, Inc., April Production Activity:
Direct Materials $20 per unit
Direct Labor $9 per unit
Variable Overhead $5 per unit
Fixed Overhead $10 per unit
Variable Selling $1 per unit
Fixed general and administrative $7 per unit
Units produced 10,000 per month
Units in beginning finished goods -
Units sold 9,000
Selling price $70 per unit
Target Profit $26,000 per month
Calculate how many units Chuck's must sell to meet its monthly?