Required:

 1. Assume Hudson has a target income of $169,000. What amount of sales (in dollars) is needed to produce this target income? 

2. If Hudson achieves its target income, what is its margin of safety (in percent)? Note: Round your answer to 1 decimal place.

Transcribed Image Text:

Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31. Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Income $ 3,862,500 3,090,000 772,500 600,000 $ 172,500 Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31. Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Income $ 3,862,500 3,090,000 772,500 600,000 $ 172,500 Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31. Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Income $ 3,862,500 3,090,000 772,500 600,000 $ 172,500 Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31. Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Income $ 3,862,500 3,090,000 772,500 600,000 $ 172,500

Answer rating: 100% (QA)

Answer To calculate the sales amount needed to produce the target income of 169000 we can use the contribution margin ratio 1 Contribution margin rati... View the full answer