Question

The contribution margin ratio of Kuck Corporation's only product is 64%. The company's monthly fixed expense is $455,800 and the company's monthly target profit is $41,800. Required: Determine the dollar sales to attain the company's target profit. (Round your answer to the nearest whole dollar amount.)

Answer 1

Answer:

Break-even point (dollars)= $777,500

Explanation:

Giving the following information:

Contribution margin ratio=  0.64

Fixed expense= $455,800

Desired profit= $41,800

To calculate the sales in dollars required, we need to use the following formula:

Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio

Break-even point (dollars)= (455,800 + 41,800) / 0.64

Break-even point (dollars)= $777,500