Moonen Corporation produces and sells a single product whose contribution margin ratio is 57%. The company's monthly fixed expense is $487,350 and the company's monthly target profit is $10,000. The dollar sales to attain that target profit is closest to:
A)$855,000
B)$277,790
C)$872,544
D)$283,490

Question

Quizplus · Accepted Answer

To calculate the dollar sales needed to attain the target profit, we can use the following formula:

(Target Profit + Fixed Expenses) / Contribution Margin Ratio = Dollar Sales

Plugging in the given values, we get:

($10,000 + $487,350) / 0.57 = $872,544.74

Therefore, the closest answer choice is C.

Moonen Corporation Produces and Sells a Single Product Whose Contribution