Vernon Company reported the following data regarding the product it sells: Sales price $70 Contribution margin ratio 15% Fixed costs $223,000 Use the contribution margin ratio approach. To obtain a profit of $59,000, what must the sales be in dollars? In units? i. 22,458 units ii. 23,550 units iii. 28,800 units iv. 26,858 units

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 17E
Question

What must the sales be?

Vernon Company reported the following data regarding the
product it sells:
Sales price
$70
Contribution margin ratio 15%
Fixed costs
$223,000
Use the contribution margin ratio approach.
To obtain a profit of $59,000, what must the sales be in
dollars? In units?
i. 22,458 units
ii. 23,550 units
iii. 28,800 units
iv. 26,858 units
Transcribed Image Text:Vernon Company reported the following data regarding the product it sells: Sales price $70 Contribution margin ratio 15% Fixed costs $223,000 Use the contribution margin ratio approach. To obtain a profit of $59,000, what must the sales be in dollars? In units? i. 22,458 units ii. 23,550 units iii. 28,800 units iv. 26,858 units
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