Answer the following questions using the information below:
The following information is for Mt.Panorama Company:
$\begin{array}{lr}
\text { Selling price } & \$ 300 \text { per unit } \
\text { Variable costs } & \$ 180 \text { per unit } \
\text { Total fixed costs } & \$ 500000
\end{array}$
-If targeted operating profit is $120 000,then targeted sales revenue is:
A)$1 550 000.
B)$700 000.
C)$950 000.
D)$1 050 000.

Question

Answer the following questions using the information below:
The following information is for Mt.Panorama Company:
 $\begin{array}{lr}
\text { Selling price } & \$ 300 \text { per unit } \
\text { Variable costs } & \$ 180 \text { per unit } \
\text { Total fixed costs } & \$ 500000
\end{array}$
-If targeted operating profit is $120 000,then targeted sales revenue is:
A)$1 550 000.
B)$700 000.
C)$950 000.
D)$1 050 000.

Quizplus · Accepted Answer

To achieve a targeted operating profit of $120,000, first calculate the contribution margin per unit, which is the selling price per unit minus the variable cost per unit: $300 - $180 = $120. Then, calculate the total contribution margin needed to cover fixed costs and achieve the targeted profit: $500,000 (fixed costs) + $120,000 (targeted profit) = $620,000. Finally, divide the total contribution margin needed by the contribution margin per unit to find the number of units needed: $620,000 / $120 = 5,167 units. Multiply the number of units by the selling price per unit to find the targeted sales revenue: 5,167 units * $300/unit = $1,550,000.

Answer the Following Questions Using the Information Below: the Following

Answer the Following Questions Using the Information Below:
the Following