Q1/ A certain chemicalengineering plant has an annualrevenue of $ 700000. Thedirect production cost was 45%of the total annual revenue. Thesum of the fixed charges,overhead, and generalexpenses equal to $180000. Itwas proposed to increase theannual sales by a factor of 40%with a 25 percent increase infixed charges, overhead, andgeneral expenses, what mustbe the new annual sales toachieve the same gross profit?

Q1. Gross profit = Annual revenue - Direct cost of production. Annual revenue $700,000…

Answered: general expenses, what must be the new…

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general expenses, what must be the new annual sales to achieve the same gross profit?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2.4P

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Question

Q1/ A certain chemical
engineering plant has an annual
revenue of $ 700000. The
direct production cost was 45%
of the total annual revenue. The
sum of the fixed charges,
overhead, and general
expenses equal to $180000. It
was proposed to increase the
annual sales by a factor of 40%
with a 25 percent increase in
fixed charges, overhead, and
general expenses, what must
be the new annual sales to
achieve the same gross profit?

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