Jagswear, Inc. earned operating income of $100,000 during 2016. The company wants to earn operating income of

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Jagswear, Inc. earned operating income of $100,000 during 2016. The company wants to earn operating income of $140,000 during 2016. Its fixed costs are expected to be $56,000, and variable costs are expected to be 30% of sales.
Instructions
(a) Determine the required sales to meet the target operating income during 2016.
(b) Fill in the dollar amounts for the summary income statement for 2016 below based on your answer to part A.
Sales revenue............................$
Variable costs.............................
Contribution margin.....................
Fixed costs................................
Operating income.......................$
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Related Book For  book-img-for-question

Managerial Accounting Tools for Business Decision Making

ISBN: 978-1118856994

4th Canadian edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

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