Slosh Cleaning Corporation services both residential and commercial customers.Slosh expects the following operating results next year for each type of customer: Slosh expects to have $18,000 in fixed expenses next year.What would Slosh's total dollar sales have to be next year in order to generate a profit of $90,000?

Question

Slosh Cleaning Corporation services both residential and commercial customers.Slosh expects the following operating results next year for each type of customer:  Slosh expects to have $18,000 in fixed expenses next year.What would Slosh's total dollar sales have to be next year in order to generate a profit of $90,000?

Quizplus · Accepted Answer

11eaaee8_677f_4148_933a_6788b7eb948b_TB5186_00 Weighted-average contribution margin ratio = $72,000 F1F1F1S1F1F1F10 $200,000 = 36%
Sales needed to achieve target profit =
(Fixed expenses + Target profit) F1F1F1S1F1F1F10 Weighted-average contribution margin ratio
= ($18,000 + $90,000) F1F1F1S1F1F1F10 36%
= $300,000

Slosh Cleaning Corporation Services Both Residential and Commercial Customers