Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%. The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000. The dollar sales to attain that target profit is closest to:
A) $471,694
B) $454,054
C) $1,188,444
D) $1,144,000

Question

Quizplus · Accepted Answer

To find the dollar sales needed to achieve the target profit, we use the formula: (Fixed Expenses + Target Profit) / Contribution Margin Ratio. Plugging in the values: ($720,720 + $28,000) / 0.63 = $1,188,444.

Logsdon Corporation Produces and Sells a Single Product Whose Contribution