Final answer:
To calculate the net sales, we use the provided controllable profit percentage and the sum of all controllable costs to derive an equation. After calculating total controllable costs, we solve for net sales using the formula, accounting for the profit percentage.
Step-by-step explanation:
You're looking for the net sales figure, which can be found by knowing the controllable profit as a percentage and the total controllable costs. According to your data, the controllable profit percentage is 30.5%. Because the controllable profit is derived from the net sales after subtracting the total controllable costs, you can set up the following equation: Controllable Profit = Net Sales - Controllable Costs.
We know the controllable costs (which include cogs, total labor, and advertising) amount to $36,250 + $27,000 + $8750 + $750 = $72,750. To find the net sales, we use the percentage given for controllable profit, which is calculated as (Controllable Profit)/(Net Sales) = 30.5%. From this relationship, we can derive the formula: Net Sales = Controllable Costs / (1 - Controllable Profit Percentage).
Replacing with the given values: Net Sales = $72,750 / (1 - 0.305) = $72,750 / 0.695. When you do the math, you can find the net sales required for achieving a 30.5% controllable profit margin on these costs.