Epex Pty Ltd makes a single product. Annual fixed expenses are $48 000 and the contribution margin ratio is 30 per cent. What volume in sales dollars is necessary for Epex to achieve a target profit of $15 000?

Question

Quizplus · Accepted Answer

To find the sales volume needed to achieve a target profit, use the formula: (Fixed Expenses + Target Profit) / Contribution Margin Ratio. Here, ($48,000 + $15,000) / 0.30 = $210,000.

Epex Pty Ltd Makes a Single Product