if the break-even point in dollar sales for a company is $360,000 and the company's contribution margin ratio is 30% and the company expects a profit of $84,000, what would the sales have to total?

If the break-even point is $360K, and if I subtract that from $640K, that leaves $280K. Then multiply $280,000 x 30% = $84,000...so the answer is $640k.

Am I right?

To calculate the total sales required, we need to consider the break-even point, the contribution margin ratio, and the expected profit. Here's how to calculate it step by step:

1. First, let's find the contribution margin. The contribution margin is the percentage of sales that remains after deducting variable expenses. Since the contribution margin ratio is given as 30%, the remaining 70% represents the variable expenses. We can calculate the contribution margin as follows:

Contribution Margin = 100% - Variable Expenses = 100% - 70% = 30%

2. Next, let's find the break-even point in dollars. The break-even point is the level of sales at which the company's revenue equals its expenses, resulting in zero profit. In this case, the break-even point is given as $360,000.

3. Now, we can determine the contribution margin per dollar of sales using the contribution margin ratio calculated earlier. To calculate the contribution margin per dollar of sales, divide the contribution margin ratio by 100:

Contribution Margin per Dollar of Sales = Contribution Margin Ratio / 100 = 30% / 100 = 0.3

4. To find the total sales required to achieve the expected profit of $84,000, we can use the formula:

Total Sales = (Fixed Expenses + Desired Profit) / Contribution Margin per Dollar of Sales

Since the break-even point represents the fixed expenses at zero profit, we can substitute $360,000 for fixed expenses and $84,000 for desired profit into the formula:

Total Sales = ($360,000 + $84,000) / 0.3

Simplifying the equation:

Total Sales = $444,000 / 0.3

Total Sales = $1,480,000

Therefore, the sales would have to total $1,480,000 to achieve the expected profit of $84,000.