Question

Honeysuckle Manufacturing has the following data: Selling Price $ 190 Variable manufacturing cost $ 72 Fixed manufacturing cost $ 276,000 per month Variable selling & administrative costs $ 61 Fixed selling & administrative costs $ 172,000 per month What dollar sales volume does Honeysuckle need to achieve a $89,000 operating profit per month? Multiple Choice a. $1,790,000. b. $9,666,000. c. $1,193,333. d. $1,576,910.

Answer 1

a. $1,790,000.

Step-by-step explanation:

operating profit:

`$$ (selling price - variable cost) * $ Quanity - Fixed Cost = Operating Profit`

Total fixed cost

276,000 + 172,000 = 448,000

Total variable cost

72 + 61 = 133

Selling price: 190

We solve for Q

(190-133)xQ- 488,000 = 89,000

Q = (89,000 + 488,000) / 57

Q = 9.421,05

This will be the amount of units. we multiply by the selling price and get the volume of sales to achieve 89,000 profit:

9.421,05 x 190 = 1,790,000