raven company has a target income of $70,700. the contribution margin ratio is 25%. what amount of dollar sales must be achieved to reach the goal if fixed costs are $37,300?

To determine the amount of dollar sales to be achieved to reach the goal, we first calculate the total contribution required. The contribution required in this case will be the sum of the target income and the fixed cost. Therefore;

contribution required = Target income + Fixed cost

contribution required = $37,300 + $70,700

contribution required = $108,000

Now the amount of dollar sales required can be determined by using the following formula of contribution margin ratio;

contribution margin ratio = Contribution margin / Sales

As the contribution margin ratio is given to be 25%, therefore;

25/100 = 108,000 ÷ Sales

0.25 × Sales = 108,000

Sales = 108,000 ÷ 0.25

Sales = $432,000

Therefore $432,000 is calculated to be the amount of dollar sales required to reach the goal.

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