Data concerning Strite Corporations single product appear be

Data concerning Strite Corporation\'s single product appear below $150.00 selling price per unit Variable expense per unit 42.00 Fixed expense per month $421,208 Assume the company\'s target profit is $8,000. The dollar sales to attain that target profit is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $429,200 $1,532857 5852.723 $596,111

Solution

Target Contribution Margin = Target Profit + Target Fixed Cost

= $ 8,000 + $ 421,200

= $ 429,200

Contribution Margin Per Unit = Selling Price Per unit - Variable Cost Per Unit

= $ 150- $ 42

= $ 108

Hence, Unit Sales required to achieve target profit = Target Contribution Margin / Contribution Margin Per Unit

= $ 429,200 / $ 108

= 3,974.074074

Hence, Dollar Sales required to achieve target profit = Unit Sales required to achieve target profit *Selling Price Per Unit

= 3,974.074074 * $ 150

= $ 596,111.11

Hence the correct answer is $ 596,111