Event Company produces a single product with the following characteristics: pric

Question

Event Company produces a single product with the following characteristics: price per unit $25.00, variable materials cost per unit $8.60, variable labour cost per unit $3.60, variable overhead cost per unit $1.80, and fixed overhead cost per unit $2.00. Event Company’s manufacturing fixed costs are $5,000,000 and selling, general and administration fixed costs are $2,500,000. Which of the following numbers is closest to the dollar sales required for Event Company to earn a target profit of $500,000?

a. $12,500,000

b. $15,909,090

c. $18,181,818

d. $20,833,333

answer: c

how to calculate ???? and whats the formula for this question

Explanation / Answer

c. $18,181,818 Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount manufacturing fixed costs            5,000,000.00 selling, general and administration fixed costs          2,500,000.00 Profit desired             500,000.00 Contribution desired          8,000,000.00 Sales price per unit                        25.00 Variable costs variable materials cost per unit                          8.60 variable labour cost per unit                            3.60 variable overhead cost per unit                          1.80 Total Variable costs                        14.00 Contribution per unit                        11.00 11x= 8000,000 11x = 8000,000 x = 727,272.73 Dollar sales = 727,272.73*25       18,181,818.18

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