Chuck’s Trucks

Chuck’s Trucks, Inc. manufactures radio-controlled toy trucks. The CFO has determined that the company needs to have monthly profits of $26,000 in order to pursue growth opportunities into new product lines. She has asked you to calculate how many units Chuck’s must sell to meet this target. Chuck’s April production activity information is provided below.Chuck’s Trucks, Inc., April Production Activity: Direct Materials $20 per unit Direct Labor $9 per unit Variable Overhead $5 per unit Fixed Overhead $10 per unit Variable Selling $1 per unit Fixed general and administrative $7 per unit

Units produced 10,000 per month Units in beginning finished goods -Units sold 9,000Selling price $70 per unit Target Profit $26,000 per month Calculate how many units Chuck’s must sell to meet its monthly Solution:Computation of units that must be sold in order to achieve the target profit:Sales price (per unit)Less: Variable Costs:Direct material Direct labor Variable overhead Variable selling =…

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