A company has direct production costs equal to 50% of total annual sales (GI), and indirect production costs (fixed charges, overhead, and general expenses) equal to $200,000. Annual sales amount to $800,000. If management proposes to increase annual sales to compensate for a 20% increase in indirect costs, and maintain same gross profit. What is the new sales level?

Answer rating: 100% (QA)

Lets denote the current annual sales as S and the current gross profit percentage as GP Given Direct ... View the full answer