Austin Manufacturing Had the Following Operating Data for the Year

Austin Manufacturing had the following operating data for the year just ended:
$\begin{array}{|l|r|}\hline \text { Selling price per unit } & \$ 60 \text { per unit } \\\hline \text { Variable expense per unit } & \$ 22 \text { per unit } \\\hline \text { Fixed expenses } & \$ 504,000 \\\hline\end{array}$
Management plans to improve the quality of its only product by replacing a component that costs $3.50 with a higher-grade component that costs $5.50,and renting a packing machine for $18,000 a year.If the desired target operating profit is $288,000,how many units must the company sell?

A) 19,300 units.
B) 21,316 units.
C) 22,500 units.
D) 20,842 units.

Correct Answer:

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