Frymire Corporation produces and sells a single product. Data concerning that product appear below:
-Assume the company's monthly target profit is $46,000.The dollar sales to attain that target profit is closest to:

Question

Frymire Corporation produces and sells a single product. Data concerning that product appear below: 
-Assume the company's monthly target profit is $46,000.The dollar sales to attain that target profit is closest to:

Quizplus · Accepted Answer

Unit CM = Selling price per unit - Variable expenses per unit
= $240.00 per unit - $79.20 per unit = $160.80 per unit
CM ratio = Unit CM F1F1F1S1F1F1F10 Unit selling price = $160.80 per unit F1F1F1S1F1F1F10 $240.00 per unit = 0.67
Dollar sales to attain a target profit = (Target profit + Fixed expenses)F1F1F1S1F1F1F10 CM ratio
= ($46,000 + $1,019,472)F1F1F1S1F1F1F10 0.67
= $1,065,472F1F1F1S1F1F1F10 0.67
= $1,590,257

Frymire Corporation Produces and Sells a Single Product