Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and the contribution margin ratio was 40%. If fixed expenses increase by $10,000 next year, what amount of sales will be necessary in order for the company to earn a profit of $80,000?

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Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and the contribution margin ratio was 40%. If fixed expenses increase by $10,000 next year, what amount of sales will be necessary in order for the company to earn a profit of $80,000?

A. $600,000
B. $570,000
C. $562,500
D. $625,000

Answer: B

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