Question

Rodeo, Inc. has a contribution margin ratio of 30%. This month, profit was $12,300 and fixed costs were $15,600. How much was Laredo's sales revenue

Answer 1

Sales= $93,000

Step-by-step explanation:

Giving the following information:

Contribution margin ratio= 0.30

Profit= $12,300

Fixed costs= $15,600

First, we need to determine the total contribution margin:

Total contribution margin= 12,300 + 15,600

Total contribtuion margin= $27,900

Now, to calculate the sales revenue, we need to use the following formula:

Sales= total contribution margin / Contribution margin ratio

Sales= 27,900/0.3

Sales= $93,000