Slosh Cleaning Corporation services both residential and commercial customers. S

Question

Slosh Cleaning Corporation services both residential and commercial customers. Slosh expects the operating results next year for each type of customer:

                                                    Residential          Commercial

Sales --------------------------------- $60,000             $140,000

Contribution margin ratio --------      50%                   30%

Slosh expects to have $18,000 in fixed expenses next year. What would Slosh's total dollar sales have to be next year in order to generate a profit of $90,000?

$216,000

$250,000

$270,000

$300,000

$216,000

$250,000

$270,000

$300,000

Explanation / Answer

Weighted Contribution margin ratio = (50%/200000*60000)+(30%/200000*140000)= 36% Total dollar sales required = (18000+90000)/36%= $300000 Option D is correct

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