Introduction to Accounting- Free-Samples for Students-Myassignment

Question: Let us assume a Company has Fixed Costs associated with its factory of $1 million the Factory can produce (and sell) half a million widgets a year, and the Costs associated with producing each widget is $1 and the price is $4.How many widgets are required to be produced for a $1 million Profit? Answer: Computation of Target Profit Particulars Amount ($) Fixed cost 1000000 Target Profit 1000000 Selling price per unit 4 Cost per unit 1 Units = (Fixed Costs + Target Profit) / (Selling price - Cost) 2000000 Units = ( $1000000 + $1000000) / ($4+$1) 3 Units = 6,66,667 The company is required to produce 6,66,667 units of Widgets to reach a target profit of $1 million. Reference List: Deegan, C. (2013).Financial accounting theory. McGraw-Hill Education Australia. DRURY, C. M. (2013).Management and cost accounting. Springer.