Waterfall Company sells a product for \( \$ 150 \) per unit. The variable cost is \( \$ 80 \) per unit, and fixed costs are \( \$ 270,000 \). Determine the (a) break-even point in sales units and (b) the sales (units) necessary if the company desires a target profit of \( \$ 36,000 \). Round answers to the nearest whole number. a. Break-even point in sales units b. Break-even points in sales units if the company desires a target profit of \( \$ 36,000 \)

To determine the break-even point in sales units and the sales units necessary if the company desires a target profit of $36,000, we can use the following formulas: 1. Break-even point in sales units: \[ \text{Break-even point} = \frac{\text{Fixed costs}}{\text{Selling price} - \text{Variable cost}} \] 2. Sales units necessary for a target profit: \[ \text{Sales units} = \frac{\text{Target profit} + \text{Fixed costs}}{\text{Selling price} - \text{Variable cost}} \] Given: - Selling price per unit = $150 - Variable cost per unit = $80 - Fixed costs = $270,000 - Target profit = $36,000 Let's calculate the break-even point in sales units and the sales units necessary for a target profit of $36,000. Calculate the value by following steps: - step0: Calculate: \(\frac{270000}{150-80}\) - step1: Subtract the numbers: \(\frac{270000}{70}\) - step2: Reduce the fraction: \(\frac{27000}{7}\) The break-even point in sales units is approximately 3857.14 units. Now, let's calculate the sales units necessary for a target profit of $36,000. Calculate the value by following steps: - step0: Calculate: \(\frac{36000+270000}{150-80}\) - step1: Add the numbers: \(\frac{306000}{150-80}\) - step2: Subtract the numbers: \(\frac{306000}{70}\) - step3: Reduce the fraction: \(\frac{30600}{7}\) The sales units necessary for a target profit of $36,000 is approximately 4371.43 units. Therefore, the break-even point in sales units is approximately 3857.14 units, and the sales units necessary for a target profit of $36,000 is approximately 4371.43 units.