Carrie sells three products.Last month's results are as follows:
$$\begin{array} { | l | r | r | r | }
\hline & \text { P1 } & \text { P2 } & \text { P3 } \
\hline \text { Revenues } & \$ 150,000 & \$ 225,000 & \$ 225,000 \
\hline \text { Variable costs } & 60,000 & 210,000 & 120,000 \
\hline
\end{array}$$
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:
$$\begin{array} { | l | r | r | r | } 
\hline & \text { P1 } & \text { P2 } & \text { P3 } \
\hline \text { Revenues } & \$ 150,000 & \$ 225,000 & \$ 225,000 \
\hline \text { Variable costs } & 60,000 & 210,000 & 120,000 \
\hline
\end{array}$$ 
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:
$$\begin{array} { | l | r | r | r | } 
\hline & \text { P1 } & \text { P2 } & \text { P3 } \
\hline \text { Revenues } & \$ 150,000 & \$ 225,000 & \$ 225,000 \
\hline \text { Variable costs } & 60,000 & 210,000 & 120,000 \
\hline
\end{array}$$ 
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