Answer:
Consider the following calculations
Explanation:
Currently:
Sales(1200 units*$130) $156000
Less:Variable costs(1200 units*$30) $36000
Contribution $120,000
Less:Fixed costs $60,000
Net operating income $60,000.
Now:
Let unit sales be 'x'.
Hence Contribution margin=($130x-$30x)=$100x.
Total fixed costs=($60,000+$12000)=$72000
Hence required contribution margin=Fixed costs+Net operating income
=($72000+$60,000)=$132000
Hence
100x=132000
Hence x=units to be sold=(132000/100)=1320 units.
Hence increase in sales must be=(1320-1200)=120 units(C).