Softie, Inc. produces facial tissues. The company's contribution margin ratio is 77%. Fixed expenses are $240,400. To achieve a

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2 years ago

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target profit of $930,000, Softies' sales must be

1 answer:

sladkih [1.3K] · Answer 1 · 2023-11-07T05:56:40+03:00

To achieve a target profit of $930,000, Softies' sales must be $1,520,000.

<h3>What is target profit?</h3>

Target profit is the amount of profit that a company's managers anticipate achieving by the conclusion of a specific accounting period.
Typically, the target profit is established from the budgeting process and is compared to the actual result in the income statement.
If they chose to earn a 20% margin on each sale, they will make a $50 profit on each chair sold.
As a result, if the corporation wishes to make $50 per chair and sell the chair for $200, the chair must be manufactured for $150 or less.

To find the target profit of Softie, Inc.:

Therefore, to achieve a target profit of $930,000, Softies' sales must be $1,520,000.

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