Carrie sells three products. Last month's results are as follows:
$$\begin{array} { l c c c c }
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Reverues } & \$ 1 5 0 , 0 0 0 & \$ 2 2 5 , 0 0 0 & \$ 2 2 5 , 0 0 0 \
\text { Variable costs } & 60,000 & 210,000 & 120,000
\end{array}$$
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the contribution margin ratio?
(b) What sales volume does Carrie need to achieve a $100,000 monthly profit?
(c) What will profit be if Carrie increases sales by 20%?

Question

Carrie sells three products. Last month's results are as follows:
 $$\begin{array} { l c c c c } 
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Reverues } & \$ 1 5 0 , 0 0 0 &  \$ 2 2 5 , 0 0 0 & \$ 2 2 5 , 0 0 0 \
\text { Variable costs } & 60,000 & 210,000 & 120,000
\end{array}$$ 
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the contribution margin ratio?
(b) What sales volume does Carrie need to achieve a $100,000 monthly profit?
(c) What will profit be if Carrie increases sales by 20%?

Quizplus · Accepted Answer

The Answer of Carrie sells three products. Last month's results are as follows:
 $$\begin{array} { l c c c c } 
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Reverues } & \$ 1 5 0 , 0 0 0 &  \$ 2 2 5 , 0 0 0 & \$ 2 2 5 , 0 0 0 \
\text { Variable costs } & 60,000 & 210,000 & 120,000
\end{array}$$ 
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the contribution margin ratio?
(b) What sales volume does Carrie need to achieve a $100,000 monthly profit?
(c) What will profit be if Carrie increases sales by 20%?

Carrie Sells Three Products Total Fixed Costs Are $100,000 Marketing and $125,000 Administrative