Flower Depot, Inc. sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 at a volume level of 10,000 units. What dollar sales level would Flower Depot have to achieve to earn a target profit of $240,000
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Ответ:
Break-even point (dollars)= $600,000
Explanation:
Giving the following information:
Selling price per unit= $10
Variable costs per unit= $4
Fixed costs= $120,000
Desired profit= $240,000
To determine the sales level to achieve the desired profit, we need to use the break-even point in dollars formula:
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (120,000 + 240,000) / [(10 -4)/10]
Break-even point (dollars)= 360,000/ 0.6
Break-even point (dollars)= $600,000
Ответ: