Answer:
The correct option is C) $1,600,000.
Explanation:
This can be calculated using the following formula:
Sales revenue required = (Fixed cost + Targeted profit) / Contribution margin ratio .......................... (1)
Where;
Fixed costs = $400,000
Contribution margin ratio = 30%
Targeted profit = $80,000
Substituting the values into equation (1) we have:
Sales revenue required = ($400,000 + $80,000) / 30%
Sales revenue required = $480,000 / 30%
Sales revenue required = $1,600,000
Therefore, the correct option is C) $1,600,000.
