Market Sales had $1,200,000 in sales last month. The variable cost ratio was 60% and operating profits were $80,000.
-What sales volume does Market's need to yield a $200,000 operating profit?

Question

Market Sales had $1,200,000 in sales last month. The variable cost ratio was 60% and operating profits were $80,000. 
-What sales volume does Market's need to yield a $200,000 operating profit?

Quizplus · Accepted Answer

Operating profit = Sales * (1 - Variable cost ratio)$200,000 = Sales * (1 - 0.60)$200,000 = Sales * 0.40Sales = $200,000 / 0.40Sales = $1,500,000

Market Sales Had $1,200,000 in Sales Last Month