If fixed costs are \( \$ 450,000 \) and the unit contribution margin is \( \$ 20 \), how many units must be sold in order to realize an operating income of \( \$ 240,000 \) ? a. 34,500 b. 10,500 c. 22,500 d. 46,500

To determine the number of units needed to be sold for a specific operating income, you can use the formula: \[ \text{Required Sales} = \frac{\text{Fixed Costs} + \text{Desired Operating Income}}{\text{Unit Contribution Margin}} \] Plugging in the values provided: \[ \text{Required Sales} = \frac{450,000 + 240,000}{20} = \frac{690,000}{20} = 34,500 \] So, the correct answer is **a. 34,500**. Understanding this concept can empower you to efficiently manage your business finances and make informed decisions that align with your profit goals! The relationship between fixed costs, contributions, and income is truly the backbone of creating a successful profit plan. This isn’t just for the classroom; businesses worldwide apply this principle whenever they set sales targets. Whether launching a new product or assessing profitability, knowing how to calculate break-even points and profit margins can lead to strategic advantages. It helps businesses remain competitive and make necessary adjustments in pricing or cost management!