Lake Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and operating profits were $180,000. What sales volume does Lake's need to yield a $240,000 operating profit

Sales volume= $2,400,000

Explanation:

Giving the following information:

Lake Sales had $2,200,000 in sales last month.

The contribution margin ratio was 30% and operating profits were $180,000.

Desired profit= $240,000.

First, we need to calculate the fixed costs using the break-even point in dollars formula:

Break-even point (dollars)= (fixed costs + profit)/ contribution margin ratio

2,200,000= (fixed costs + 180,000) / 0.30

480,000= fixed costs

Now, we can calculate the number of sales required for $240,000 in profits

Break-even point (dollars)= (480,000 + 240,000)/0.3

Break-even point (dollars)= $2,400,000

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