Question

Refer to the information in Exercise.
In Exercise
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (9,600 units at $225 each) . . . . . . . . . . . . . . . . $2,160,000
Variable costs (9,600 units at $180 each) . . . . . . . . . 1,728,000
Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . $ 432,000
Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000
Pretax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,000
1. Assume Hudson Co. has a target pretax income of $162,000 for 2016. What amount of sales (in dollars) is needed to produce this target income?
2. If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)? (Round to one decimal place.)


$1.99
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  • CreatedApril 23, 2015
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