Boening Enterprises, Inc., produces and sells a single product whose selling price is $130.00 per unit and whose variable expense is $39.00 per unit. The company's monthly fixed expense is $509,600.
-Assume the company's monthly target profit is $22,000. The dollar sales to attain that target profit is closest to:

Question

Quizplus · Accepted Answer

First, we need to calculate the contribution margin per unit:
Contribution Margin = Selling Price - Variable Expenses
Contribution Margin = $130.00 - $39.00
Contribution Margin = $91.00 per unit

Next, we calculate the monthly break-even point:
Break-Even Point (in units) = Fixed Expenses / Contribution Margin
Break-Even Point (in units) = $509,600 / $91.00
Break-Even Point (in units) = 5,600 units

Now, we can use the formula to calculate the required sales to reach the target profit:
Target Profit = (Sales - Variable Expenses - Fixed Expenses)
Units Sold = (Target Profit + Fixed Expenses) / Contribution Margin
Units Sold = ($22,000 + $509,600) / $91.00
Units Sold = 6,000 units

Finally, we can calculate the dollar sales to attain the target profit:
Dollar Sales = Units Sold * Selling Price
Dollar Sales = 6,000 units * $130.00
Dollar Sales = $780,000

Therefore, the dollar sales to attain the target profit of $22,000 is $759,429, closest to option B.