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Make a contribution margin income statement to check work

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Reference no: EM132664557

APPLY THE CONCEPTS: Target income (sales revenue)Price and Cost InformationAmount
Another useful method for figuring out the type of performance your company will need to reach a target income is by using sales revenue. Rather than using the number of units, this method uses total sales revenue. In companies for which the total set of goods produced and sold is more varied, this would be the preferred method, as opposed to a business in which only one product is sold. Assume a company has pricing and cost information as follows:

Selling Price per Unit$20

Variable Cost per Unit$10

Total Fixed Cost$12,000

Problem 1: For the upcoming period, the company wishes to generate operating income of $75,000. Given the cost and pricing structure for the company's product, how much sales revenue must it generate to attain its target income?

Problem 2: Calculate the contribution margin ratio

Problem 3: Calculate the sales revenue required to attain the target income

Problem 4: a contribution margin income statement, to check your previous work

Reference no: EM132664557

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