Solution-Required revenue to achieve target operating income

Required revenue to achieve target operating income

Reference no: EM131435141

Assume the following: (1) Desired target operating income $20,000; unit price for sales $500; variable costs per unit $300; total fixed cost $10,000. (2) We have applied the formula to calculate the contribution margin method of determining target operating income, and have arrived at a numerator amount of $30,000 (20,000 plus 10,000) and a denominator amount of $200 (500 minus 300). (3) These figures yield an answer of 150 units (30,000 divided by 200). What is the required revenue to achieve the target operating income of $20,000?

$30,000
$45,000
$75,000
$150,000
None of the above

Reference no: EM131435141

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Required revenue to achieve target operating income

Reference no: EM131435141

Reference no: EM131435141

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