it a medium-size manufacturer of bicycles. during the year a new line call "Radical" was made available to Frank customers. The break-even point for sales of Radical is 250,000 with a contrbution margin ratio of 40 percent. Assuming that the profit for the radical line during the year amounted to 80,000 total sales during the year would have amounted to:
To determine the total sales during the year, we need to calculate the break-even sales for the Radical line and then add the profit of $80,000 to get the total sales amount.
First, let's calculate the break-even sales for the Radical line:
Break-even sales (in dollars) = Break-even point / Contribution margin ratio
Break-even sales = $250,000 / 0.4
Break-even sales = $625,000
Now, we can calculate the total sales by adding the profit to the break-even sales:
Total sales = Break-even sales + Profit
Total sales = $625,000 + $80,000
Total sales = $705,000
Therefore, the total sales during the year would have amounted to $705,000.