Raven Company has a target of $70,000 pre-tax income.The contribution margin ratio is 30%.What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

A) $23,333.
B) $36,000.
C) $300,000.
D) $353,333.
E) $420,000.

Question

victoria macklai · Accepted Answer

Final Answer : D, Explanation :  Contribution margin (CM) = Sales - Variable costsCM ratio = CM/SalesWe can use the formula method to find the dollar sales needed:$70,000 + $36,000 = (Sales * 30%)$106,000 = 0.3(Sales)$353,333 = Sales

Raven Company has a target of $70,000 pre-tax income.The contribution margin ratio is 30%.What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

A) $23,333.
B) $36,000.
C) $300,000.
D) $353,333.
E) $420,000.

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Raven Company has a target of $70,000 pre-tax income.The contribution margin ratio is 30%.What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?A) $23,333.B) $36,000.C) $300,000.D) $353,333.E) $420,000.

Definitions

Learning Objectives

Learning Objectives

Related questions

Raven Company has a target of $70,000 pre-tax income.The contribution margin ratio is 30%.What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

A) $23,333.
B) $36,000.
C) $300,000.
D) $353,333.
E) $420,000.