Quality Stores,Inc. ,sells several products.Information of average revenue and costs is as follows:
$\begin{array}{ll}
\text { Selling price per unit } & \$ 23 \
\text { Variable costs per unit: } & \
\text { Direct material } & \$ 6 \
\text { Direct manufacturing labor } & \$ 1.90 \
\text { Manufacturing overhead } & \$ 0.40 \
\text { Selling costs } & \$ 2 \
\text { Annual fixed costs } & \$ 96,000
\end{array}$
The revenues that the company must earn annually to make a profit of $144,000 are ________.(Round the final answer to the nearest dollar. )

Question

Quizplus · Accepted Answer

To find the required revenue, first calculate the total contribution margin needed: $144,000 (desired profit) + $96,000 (fixed costs) = $240,000. The contribution margin per unit is $23 (selling price) - $10.30 (total variable costs) = $12.70. The number of units needed is $240,000 / $12.70 = 18,897 units. The revenue required is 18,897 units * $23 = $434,646.

Quality Stores,Inc The Revenues That the Company Must Earn Annually to Make