Better Bonds
Better Bonds provided the following data: $\begin{array}{lr}
\text { Sales } & \$ 540,000 \
\text { Variable costs } & \$ 378,000 \
\text { Fixed costs } & \$ 120,000 \
\text { Expected production and sales in units } & 40,000
\end{array}$
-Refer to Better Bonds. How many sales in dollars are needed to generate a profit of $30,000?

Question

Quizplus · Accepted Answer

To find the sales needed to generate a profit of $30,000, calculate the contribution margin per unit and use it to determine the required sales. Contribution margin per unit = (Sales - Variable Costs) / Units = ($540,000 - $378,000) / 40,000 = $4.05. Total contribution margin needed = Fixed Costs + Desired Profit = $120,000 + $30,000 = $150,000. Required sales = Total contribution margin needed / Contribution margin ratio = $150,000 / ($4.05 / $13.50) = $500,000.

Better Bonds Better Bonds Provided the Following Data -Refer to Better Bonds

Better Bonds
Better Bonds Provided the Following Data -Refer to Better Bonds