Answer:
The company need to sale $4,918,888.89.
Explanation:
Giving the following information:
Flannigan Company manufactures and sells a single product that sells for $580 per unit; variable costs are $319.
Annual fixed costs are $958,500.
Desired income= $1,255,000.
To calculate the total dollar sales to reach the goal, we need to use the break-even point formula:
Break-even point (dollars)= (fixed costs + desired profit)/ contribution margin ratio
Break-even point (dollars)= (958,500 + 1,255,000) / [(580 - 319) / 580]
Break-even point (dollars)= 2,213,500 / 0.45
Break-even point (dollars)= $4,918,888.89
Answer:
$4,918,889
Explanation:
Target Sales Can be calculated using target income, fixed cost and contribution margin ratio.
Contribution margin ration is the rate of contribution margin to the sales value of the given product.
Contribution Margin = Sales Price - Variable cost = $580- $319 = $261
Contribution Margin ratio = Contribution Margin / Sales = $261 / $580 = 0.45 = 45%
Sales = ( Target Income + Fixed Cost ) / Contribution Margin ratio
Sales = ( $1,255,000 + $958,500 ) / 45%
Sales = $2,213,500 / 0.45 = $4,918,889
