Bonita Industries has fixed costs of 2700000 and variable co

Bonita Industries has fixed costs of $2700000 and variable costs are 20% of sales. What are the required sales if Bonita desires net income of $300000?

$3375000

$15000000

Solution

Required sales = ( fixed cost + target income)/contribution margin contribution margin = 80% of sales since variable cost is 20% of sales =(2700000+300000)/80% 3750000 answer