XYZ Company has a variable cost ratio of 40%, fixed expenses of $200,000, and desires to earn operating income of $100,000.Total sales revenue required to achieve XYZ Company's desired operating income is:

Question

Quizplus · Accepted Answer

To find the total sales revenue required, use the formula: Sales = (Fixed Expenses + Desired Operating Income) / (1 - Variable Cost Ratio). Plugging in the values: Sales = ($200,000 + $100,000) / (1 - 0.40) = $500,000.

XYZ Company Has a Variable Cost Ratio of 40%, Fixed