Question

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%. The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000. The dollar sales to attain that target profit is closest to:

Answer 1

Answer: $1188444

Explanation:

Based on the information given in the question, the dollar sales to attain that target profit will be calculated as:

= (Fixed cost + Desired profit) / Contribution margin ratio

= (720720 + 28000) / 63%

=748720/63%

= 748720/0.63

= 1188444