Montoya Manufacturing has fixed costs of $3000000 and variable costs are 40% of sales. What are the required sales if Montoya desires net income of $300000?
A) $5500000
B) $5000000
C) $8250000
D) $7500000

Question

Quizplus · Accepted Answer

Net income = Sales - (Fixed costs + Variable costs)$300,000 = Sales - ($3,000,000 + 0.40 * Sales)0.60 * Sales = $3,300,000Sales = $3,300,000 / 0.60 = $5,500,000

Montoya Manufacturing Has Fixed Costs of $3000000 and Variable Costs