SOLUTION: if my current sales for the year is $175,000 and I need 35% to cover my overhead and expenses....If I want to increase my gross profit dollars by $20,000 how much do I have to incr

Question 540867: if my current sales for the year is $175,000 and I need 35% to cover my overhead and expenses....If I want to increase my gross profit dollars by $20,000 how much do I have to increase my sales by?
Answer by jpg7n16(66) (Show Source): You can put this solution on YOUR website!
Per the question, here's what we know. Essentially, every dollar of sales (let's call that "S") can be broken into 2 parts: the amount it cost to make (let's call that "C") and the amount of profit made (let's call this one "P"). Turn that into an equation:
or for each $1 of sales
Since the problem tells you the cost is $0.35 of every dollar, all you really need to do is plug in .35 for C

So we know that $0.65 of every dollar of sales is profit. How do you express that as an equation?

The question is asking, what amount of sales (S) will give you a profit (P) of $20,000. So plug what you know into this equation, and solve for sales (S):

Therefore, if 35% of your sales cover your expenses, you would need $30,769.23 of sales to earn $20,000 profit.
That's the long explained version. The short easy version for next time - just take the profit you need, and divide by the profit percentage.

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