Honeysuckle Manufacturing Has the Following Data -
What Dollar Sales Volume Does Honeysuckle Need to Achieve

question 74

Multiple Choice

Honeysuckle Manufacturing has the following data:
$$\begin{array} { ll } \text { Selling Price } & \$ \quad 60 \\\text { Variable manufacturing cost } & \$ \quad 33 \\\text { Fixed manufacturing cost } & \$ 250,000 \text { per month } \\\text { Variable selling \& administrative costs } & \$ \quad 9 \\\text { Fixed selling \& administrative costs } & \$ 120,000 \text { per month }\end{array}$$

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What dollar sales volume does Honeysuckle need to achieve a $50,000 operating profit per month?

• A) $1,400,000.
• B) $7,560,000.
• C) $933,333.
• D) $1,233,333.

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Definitions:

Novation

The act of replacing an existing obligation with a new one, thereby extinguishing the original obligation.

Substituted Contract

This is a legal agreement replacing an earlier contract, agreed upon by all parties involved, and discharging the original contractual obligations.

Obligee

The party in a contract or agreement who is entitled to receive a performance or benefit from the obligor.

Obligor

An individual or entity legally obliged to provide a payment or service to another party under the terms of a contract.