The contribution margin ratio of Lime Corporation's only product is 75%.The company's monthly fixed expense is $688,500 and the company's monthly target profit is $20,000.The dollar sales to attain that target profit is closest to:

Question

Quizplus · Accepted Answer

Dollar sales to attain a target profit = (Target profit + Fixed expenses)F1F1F1S1F1F1F10 CM ratio
= ($20,000 + $688,500)F1F1F1S1F1F1F10 0.75
= $708,500 F1F1F1S1F1F1F10 0.75
= $944,667

The Contribution Margin Ratio of Lime Corporation's Only Product Is