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# Yellow Dot, Inc sells a single product for \$12 Variable costs are

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Yellow Dot, Inc. sells a single product for \$12. Variable
costs are \$4 per unit and fixed costs total \$140,000 at a
volume level of 7,800 units. What dollar sales level would
Yellow Dot have to achieve to earn a target profit of
\$60,000?
Solution
Contribution margin ratio= (12-4)/12= 0.667
dollar sales level = (140000+60000)/0.667= \$300,000

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Yellow Dot, Inc. sells a single product for \$12. Variable costs are \$4 per unit and fixed costs total \$140,000 at a volume level of 7,800 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of \$60,000? Solution Contribution margin ratio= (12-4)/12= 0.667 dollar ...
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