Consider the information in the following table.
Fixed costs
$150,000
Selling price per unit
$120
Variable cost per unit
$60
What is the sales revenue that would yield a net profit of $30,000?
(Calculate volume to the nearest unit.)
Sales revenue needed is $________.
The correct answer is: $360,000.
Required contribution
= fixed costs + required profit
= $(150,000 + 30,000)
= $180,000
Required sales volume
= required contribution/contribution per unit
= $180,000/$60
= 3,000 units.
Sales revenue
= 3,000 x $120
= $360,000.
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