Question

Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales

Answer 1

B) $200,000

Step-by-step explanation:

Mardist's current income statement:

total revenue $100,000

variable expenses $75,000 (75% total sales)

fixed expenses $30,000

net loss -$5,000

if Mardist's total sales increase to:

revenue $187,500 $200,000 $225,500 $180,000

variable 75% $140,625 $150,000 $169,125 $135,000

fixed $30,000 $30,000 $30,000 $30,000

net gain $17,500 $20,000 $26,375 $15,000

% from total sales 9.3% 10% 11.70% 8.3%