Kitchen Help Inc. (KHI) is a manufacturer of toaster ovens. To improve control over operations, the president of KHI wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for KHI's expected costs at production levels of 86,000, 101,000, and 116,000 units.
| Variable costs |
|
|
| Manufacturing |
|
$6 per unit |
| Administrative |
|
$4 per unit |
| Selling |
|
$2 per unit |
| Fixed costs |
|
|
| Manufacturing |
|
$150,000 |
| Administrative |
|
$78,000
If KHI sells the toaster ovens for $17 each, how many units will it have to sell to make a profit of $301,500 before taxes?
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