Question

Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales

Answer 1

Answer:

B) $200,000

Explanation:

Mardist's current income statement:

total revenue              $100,000

variable expenses        $75,000 (75% total sales)

fixed expenses             $30,000

net loss                          -$5,000

if Mardist's total sales increase to:

revenue                  $187,500      $200,000      $225,500      $180,000

variable 75%          $140,625       $150,000        $169,125       $135,000

fixed                        $30,000         $30,000        $30,000        $30,000

net gain                    $17,500        $20,000         $26,375         $15,000

% from total sales       9.3%             10%                11.70%              8.3%