Question

After conducting a market research​ study, Magnificent Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $ 240. The annual target sales volume for interior doors is 23 comma 000. Magnificent has target operating income of 30​% of sales. What are target sales​ revenues?

Answer 1

Target of Sales revenue =$1,656,000

Step-by-step explanation:

Target operating income

23,000 x (240 x30%)

=23000 x 72

=$1,656,000

Answer 2

The target sales revenue for Magnificent Manufacturing after having conducted the market research is $5,520,000

Step-by-step explanation:

Sales dollar value is a function of two variables,namely the sales price per unit and the volume of sales,hence the target sales revenue is target sales price of $240 multiplied by the target sales volume of 23,000 interior doors

Target sales revenue=$240*23,000=$5,520,000

The target operating income=target sales revenue*30%=$5,520,000*30%=$ 1,656,000.00