A company has fixed costs of $270,000,a unit contribution margin of $14,and a contribution margin ratio of 55%.If the company wants to earn a target $60,000 pretax income,what amount of sales must it make (rounded to the nearest whole dollar)?
A)490,909.
B)330,000.
C)109,090.
D)381,818.
E)600,000.

Question

Quizplus · Accepted Answer

To find the required sales, use the formula: Required Sales = (Fixed Costs + Target Income) / Contribution Margin Ratio. Here, Required Sales = ($270,000 + $60,000) / 0.55 = $600,000.

A Company Has Fixed Costs of $270,000,a Unit Contribution Margin