In 2019, X Company's profit function was 0.34R - $94,500, where R is revenue. In 2020,...

Question

Question

In 2019, X Companys profit function was 0.34R - $94,500, where R is revenue. In 2020, the relationship between revenue and v

Answer 1

Answer #1

Profit before tax = $38,900 / 60% = $64,833

Total fixed cost = $94,500 + $23,625 = $118,125

0.34R is contribution margin. 34% of revenue is contribution margin.

Total sales = ($64,833 + $118,125) / 34% = $538,112 or $538,113

Note: There are no instructions regarding the number of decimal places the answer is rounded off to the nearest dollar.

Answer 2

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