Answer:
$ 170 000
Explanation:
Data:
The fixed monthly costs = $ 83 000
Contribution margin ratio = 40 %
target monthly income = $ 15 000
The monthly costs as a result of 40 % = 0.4 × 83 000
= 33 200
The contribution will be $ 83 000 + ($ 15 000 × 12) + 33000 = $ 170 000
Answer:
$245,000
Explanation:
The targeted income is the difference between the targeted sales an dthe total expense incurred. The total expense is the sum of the fixed and variable expenses.
The variable expense and sales are a function of the level of activity or units produced and sold. Contribution margin is the difference between sales and variable expense.
The ratio is the ratio of contribution margin to sales. Contribution margin less fixed cost gives the monthly income.
Contribution margin = $15,000 + $83,000
= $98,000
Total sales to achieve targeted income
=Contribution margin/ contribution margin ratio
= $98000/0.4
= $245,000
