Honeysuckle Manufacturing has the following data:
$$\begin{array} { ll }
\text { Selling Price } & \$ \quad 60 \
\text { Variable manufacturing cost } & \$ \quad 33 \
\text { Fixed manufacturing cost } & \$ 250,000 \text { per month } \
\text { Variable selling \& administrative costs } & \$ \quad 9 \
\text { Fixed selling \& administrative costs } & \$ 120,000 \text { per month }
\end{array}$$

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What dollar sales volume does Honeysuckle need to achieve a $50,000 operating profit per month?
A) $1,400,000.
B) $7,560,000.
C) $933,333.
D) $1,233,333.

Question

Honeysuckle Manufacturing has the following data:
$$\begin{array} { ll } 
\text { Selling Price } & \$ \quad 60 \
\text { Variable manufacturing cost } & \$ \quad 33 \
\text { Fixed manufacturing cost } & \$ 250,000 \text { per month } \
\text { Variable selling \& administrative costs } & \$ \quad 9 \
\text { Fixed selling \& administrative costs } & \$ 120,000 \text { per month }
\end{array}$$

-
What dollar sales volume does Honeysuckle need to achieve a $50,000 operating profit per month?
A) $1,400,000.
B) $7,560,000.
C) $933,333.
D) $1,233,333.

Quizplus · Accepted Answer

Explanation:Contribution Margin = $60 - $33 = $27Contribution Margin Ratio = $27/$60 = 45%Operating Profit = $50,000Sales Volume = $50,000/45% = $1,111,111.11Adding back fixed costs:Sales Volume = $1,111,111.11 + $250,000 + $120,000 = $1,481,111.11Therefore, Honeysuckle needs to achieve a dollar sales volume of $1,481,111.11 to achieve a $50,000 operating profit per month.

Honeysuckle Manufacturing Has the Following Data - What Dollar Sales Volume Does Honeysuckle Need to Achieve

Honeysuckle Manufacturing Has the Following Data -
What Dollar Sales Volume Does Honeysuckle Need to Achieve