ntent Assessments. Communication? Resources, D2L HELP \' University Resources v
ID: 2414084 • Letter: N
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ntent Assessments. Communication? Resources, D2L HELP ' University Resources v XAM #2 e Limit: 1:15:00 Time Left:0:42:09 Amanda Petroski: Attempt 1 ston. Question 30 (2 points) ? ???? 6 of 43 questions saved Caribou Corporation is a single product firm with the following cost formula for all of its costs for next year: Y- $225,000 $30x. Caribou sells its product for $120 per unit. What would Caribou's total sales dollars have to be next year in order to generate $270,000 of net age 1: operating income? $618,750 $660,000 $1,080,000 $1,980,000 2 BB a Page 2: Page 4 SavedExplanation / Answer
Answer:-Total sales dollars to generate desired income =(Fixed costs+ Desired operating income)/ Contribution margin ratio
=($225000+$270000)/75%
=$660000
Contribution margin ratio=(Contribution margin per unit/Selling price per unit)*100
={($120-$30)/$120}*100
=($90/$120)*100 =75%
Explanation=No. of units to be sold =$660000/$120 per unit
=5500 units
Y=$225000+$30 *5500 units =$390000
Desired net operating income =Sales- Total costs
=$660000-$390000=$270000
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