Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan Company management targets an annual pre-tax income of $1,125,000. Compute the unit sales to earn the target pre-tax net income.

d. 10,694 units

Explanation:

We calculate the break even units by using formula:

Break even units =                                   Fixed Cost                                  

                                             Sales per unit - Variable Cost per unit

We just add the target profit in break even formula to calculate how much units needs to be sold to calculate the target profit.

Target Profit Units =              Fixed Cost + Target Profit          

                                     Sales per unit - Variable Cost per unit

Now simply put the values into the formulas:

Target Profit Units =    800,000 + 1,125,000

                                         450 - 270

Target Profit Units = 1,925,000

                                      180

Target Profit Units =  10,694 units

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.