Harvest Corp.has a contribution margin ratio of 30%,fixed costs of $45,000,and a profit of $60,000.What are total sales?
A)$31,500
B)$105,000
C)$150,000
D)$350,000

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 = ($60,000 + $45,000) / 0.30 = $350,000.