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QUESTION

Chuck's Trucks, Inc. manufactures radio-controlled toy trucks.

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 unitDirect Labor $9 per unitVariable Overhead $5 per unitFixed Overhead $10 per unitVariable Selling $1 per unitFixed general and administrative $7 per unitUnits produced 10,000 per monthUnits in beginning finished goods -Units sold 9,000Selling price $70 per unitTarget Profit $26,000 per monthCalculate how many units Chuck's must sell to meet its monthlySolution:Computation of units that must be sold in order to achieve the target profit:Sales price (per unit)Less: Variable Costs:Direct materialDirect laborVariable overheadVariable selling =...
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