Louise Corp.has a contribution margin ratio of 35%,fixed costs of $60,000,and a profit of $45,000.What are total sales?
A)$300,000
B)$105,000
C)$36,750
D)$171,429

Question

Quizplus · Accepted Answer

To find total sales, use the formula: Profit = (Contribution Margin Ratio * Sales) - Fixed Costs. Rearranging gives Sales = (Profit + Fixed Costs) / Contribution Margin Ratio. Plugging in the values: Sales = ($45,000 + $60,000) / 0.35 = $300,000.