Ask Question
25 January, 18:42

A company has fixed costs of $270,000, a unit contribution margin of $14, and a contribution margin ratio of 55%. If the firm wants to earn a target $60,000 pretax income, what amount of sales must the company make (rounded to the nearest whole dollar) ?

0
Answers (1)
  1. 25 January, 20:18
    0
    Company must make sales of $600,000.

    Explanation:

    Compute the contribution margin of the company:

    Contribution margin=Pre-Tax Income+Fixed Cost

    =$60,000+$270,000

    =$330,000

    Thus, the contribution margin is $330,000. It is computed by summing up the fixed cost and the pre-tax income of the company.

    Compute the total sales of the company:

    Contribution margin ratio = Contribution margin / Sales

    55% = $330,000 / Sales

    Sales = $55% / $330,000

    =$600,000

    The sales of the company are $600,000.
Know the Answer?
New Questions in Business
At the family picnic, Benjamin ate a hamburger, hot dog, ear of corn, heaping pile of chips, three slices of watermelon, and a piece of cherry pie. It was a light meal. What does the phrase "light meal" mean in the passage?
Answers (1)
Yvonne put $4,000 in a savings account. at the end of 3 years, the account had earned $960 in simple interest. a. how much does she have in her account at the end of the three years? b.
Answers (1)
Q = It Charge = current x time tions Define "charge" and give its unit and symbol
Answers (1)
An investor sold 100 shares of stock valued at $34.50 per share. The stock was purchased at $7.25 per share two years ago.
Answers (1)
What is the "simple interest" earned if you invest $545 in a savings account that earns 3.25% for two years? A) $34.97 B) $35.43 C) $354.35 D) $36.00
Answers (1)
What were the three roots of medieval culture in the western europe?
Answers (2)
A single die is rolled one time. Find the probability of rolling a number greater than 4 or less than 3
Answers (1)
A firewall can be configured to block hosts with selected IP address ranges from connecting to a particular TCP port on a server that is available to hosts in other IP address ranges. A. True B. False
Answers (1)
Translate the following sentences into Spanish. 1. And who is Julio? 2. So then, who is Alberto? 3. No, it is not Jorge. 4. It is Amado, right? 5. No, it's not Amado. 6. Alfonzo is a prince, but he is an enemy also. 7. Maria is from Chile too. 8.
Answers (2)
Which actions are functions of the somatic nervous system? Check all that apply. regulates involuntary activities increases heart rate and blood pressure relays information to and from internal organs stimulates digestion regulates voluntary
Answers (2)