APPLY THE CONCEPTS: Target income (number of units sold)

Suppose a business has pricing and cost information as follows::

Price and Cost Information Amount

Selling Price per Unit $10.00

Variable Cost per Unit $2.50

Total Fixed Cost $600

For the upcoming period, the company wishes to generate operating income of $900. Given the cost and pricing structure for the company's product, how many units must the company sell to attain its target income?

Sales $ 2,000

Total Variable expense 500

Total contribution margin $________

Total fixed expense 600

Operating income $900