Compute the Level of Sales Required to Attain a Target Profit [LO5]

Liman Corporation has a single product whose selling price is $140 and whose variable expense is

$60 per unit. The company’s monthly fixed expense is $40,000.

Required:

1. Using the equation method, solve for the unit sales that are required to earn a target profit of

$6,000.

2. Using the formula method, solve for the dollar sales that are required to earn a target profit of

$8,000.