Locus Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Locus Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level? A.1,120.
B. 8,214.
C.11,200.
D.12,320.
E.14,080.

D.12,320.

Explanation:

The computation of the number of units to be sold for attaining the target income level is given below:

Target profit

= 10% of fixed cost

= 10% of 112,000

= 11200

Now  

Sales needed = (Fixed costs +target profit) ÷ unit contribution margin

= (112,000+11,200) ÷ (35-25)

= 123,200 ÷ 10

= 12,320 units

answer; i believe that the correct answer is (d); the business benefits because owners can share responsibilities;

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.