Raven Company has a target of earning $71,900 pre-tax income. The contribution margin ratio is 25%. What amount of dollar sales

Question

1 year ago

8

must be achieved to reach the goal if fixed costs are $39,800?
a. $39,800.
b. $287,600.
c. $446,800.
d. $375,200.
e. $534,400.

1 answer:

VMariaS [17] · Answer 1 · 2024-03-06T04:03:21+03:00

The number of dollar sales to be achieved to reach the goal is $287,600

<h3>What is a dollar?</h3>

The official money of the United States of America is the USD (United States dollar).
One hundred cents make up one dollar, often known as the U.S. dollar. It is distinguished from other currencies based on the dollar by the symbol $ or US$.
The U.S. dollar, which is considered a standard, is the most widely used money in transactions globally. In addition, it is used as the official currency in several regions outside of the U.S., while many others use it alongside their own as an unofficial currency.

We have the following details:

Fixed Cost = $ 39,800

Earning Required = $71,900

Hence

Contribution Required= Fixed Cost+Earning Required

Contribution Required = ($39,800+$71,900)

Contribution Required = $ 111,700

We use then the following formula:

Contribution Margin ratio = Contribution Margin/Sales

25%= $ 109,900/Sales

Sales = $ 109,900/25%

Sales = $287,600.

The number of dollar sales to be achieved to reach the goal is $287,600

To learn more about dollar with the given link

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