Framing House,Inc.produces and sells picture frames.Variable costs are $17 per frame,and fixed costs for the year total $130,000.The selling price is $25 per frame.The sales dollars required to make a before-tax profit of $20,000 are calculated to be:

Question

Quizplus · Accepted Answer

To calculate the sales dollars required to make a before-tax profit of $20,000, we need to use the following formula:

Sales - Variable Costs - Fixed Costs = Profit

Let's plug in the given values:

$25Q - $17Q - $130,000 = $20,000

Simplifying the equation, we get:

$8Q = $150,000

Q = 18,750

Therefore, the required sales dollars to make a profit of $20,000 are:

Sales = $25 x 18,750 = $468,750

So, the best choice is B.