Maziarz Corporation produces and sells a single product. Data concerning that product appear below:

-Assume the company's target profit is $12,000.The dollar sales to attain that target profit is closest to:

Question

Maziarz Corporation produces and sells a single product. Data concerning that product appear below:
 
-Assume the company's target profit is $12,000.The dollar sales to attain that target profit is closest to:

Quizplus · Accepted Answer

Unit CM = Selling price per unit - Variable expenses per unit
= $200.00 per unit - $68.00 per unit = $132.00 per unit
CM ratio = Unit contribution margin ÷ Unit selling price = $132.00 per unit ÷ $200.00 per unit = 0.66
Dollar sales to attain a target profit = (Target profit + Fixed expenses) ÷ CM ratio
= ($12,000 + $514,800) ÷ 0.66
= $526,800 ÷ 0.66 = $798,182

Maziarz Corporation Produces and Sells a Single Product