Upchurch Corporation produces and sells a single product.Data concerning that product appear below: Assume the company's target profit is $14, 000.The dollar sales to attain that target profit is closest to:

Question

Upchurch Corporation produces and sells a single product.Data concerning that product appear below:  Assume the company's target profit is $14, 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
= $100.00 per unit - $34.00 per unit = $66.00 per unit
CM ratio = Unit CM ÷ Unit selling price = $66.00 per unit ÷ $100.00 per unit = 0.66
Dollar sales to attain a target profit = (Target profit + Fixed expenses)÷ CM ratio
= ($14, 000 + $312, 180)÷ 0.66
= $326, 180 ÷ 0.66
= $494, 212

Upchurch Corporation Produces and Sells a Single Product