The Contribution Margin Ratio of Donath Corporation's Only Product Is

question 129

Essay

The contribution margin ratio of Donath Corporation's only product is 65%. The company's monthly fixed expense is $573,300 and the company's monthly target profit is $9,100.
Required:
Determine the dollar sales to attain the company's target profit. Show your work!

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Definitions:

Perfect Competitor

A theoretical market structure characterized by many buyers and sellers, homogeneous products, and no barriers to entry or exit, leading to perfect information and no control over prices.

Short Run

In economics, a period in which at least one input, such as plant size, cannot be changed; distinct from the long run where all inputs can be varied.

Long Run

A period in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied changes by an unlimited amount in response to any change in price.