The Monterra Company provided the following information: $\begin{array}{ll}
\text { Sales } & \$ 500,000 \
\text { Variable costs } & \$ 100,000 \
\text { Fixed costs } & \$ 200,000
\end{array}$
A. What is the contribution margin ratio?
B. What is the level of sales in dollars necessary to generate a profit of $40,000?
C. What is the contribution margin ratio if the sales price is increased by 10%?
D. Using the information in part C, what level of sales in dollars is necessary to generate a profit of $40,000?

Question

The Monterra Company provided the following information: $\begin{array}{ll}
\text { Sales } & \$ 500,000 \
\text { Variable costs } & \$ 100,000 \
\text { Fixed costs } & \$ 200,000
\end{array}$ 
A.	What is the contribution margin ratio?
B.	What is the level of sales in dollars necessary to generate a profit of $40,000?
C.	What is the contribution margin ratio if the sales price is increased by 10%?
D.	Using the information in part C, what level of sales in dollars is necessary to generate a profit of $40,000?

Quizplus · Accepted Answer

The Answer of The Monterra Company provided the following information: $\begin{array}{ll}
\text { Sales } & \$ 500,000 \
\text { Variable costs } & \$ 100,000 \
\text { Fixed costs } & \$ 200,000
\end{array}$ 
A.	What is the contribution margin ratio?
B.	What is the level of sales in dollars necessary to generate a profit of $40,000?
C.	What is the contribution margin ratio if the sales price is increased by 10%?
D.	Using the information in part C, what level of sales in dollars is necessary to generate a profit of $40,000?