Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales?

Question

Quizplus · Accepted Answer

To achieve a profit of 10% of sales, the sales must cover variable expenses, fixed expenses, and the desired profit. Let X be the sales amount. Then, 0.9X = X - $75,000 - $30,000. Solving for X gives $200,000.

Mardist Corporation Has Sales of $100,000, Variable Expenses of $75,000