Refer to the information provided for Apope Corporation.The dollar amount of desired profit from the production and sale of the company's product is:
A)$117,600.
B)$250,000.
C)$120,000.
D)$245,000.

Question

Quizplus · Accepted Answer

According to the information provided, the total cost of production is $930,000 and the company aims to make a profit of 12.9% on sales. Therefore, the desired profit would be 12.9% of the total revenue, which can be calculated as:
Desired profit = 12.9% of (Total cost of production + Desired profit)
$120,000 = 12.9% of ($930,000 + Desired profit)
$120,000 = 0.129($930,000 + Desired profit)
$120,000 = $119,970 + 0.129 Desired profit
0.129 Desired profit = $30
Desired profit = $30/0.129
Desired profit = $232,558.14
Therefore, the dollar amount of desired profit is $232,558.14, which is closest to option C ($120,000).

Refer to the Information Provided for Apope Corporation