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Last year, Rachael Knapp Dealership LLC. reported a profit of $136,000 total sales associated with the...

Last year, Rachael Knapp Dealership LLC. reported a profit of $136,000 total sales associated with the profit is $720,000; their contribution margin ratio was calculated to be 48%. The marketing manager argues that if Advertising costs (fixed expenses) is increased by $90,000. What amount of sales will be necessary in order for the company to earn a profit of $230,000?

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Answer #1

Sales S 1,103,333 Working notes: Reported Profit = $136.000 Total sales $720,000 Contribution margin = 48% Contribution margi

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