Assume Hudson has a target income of $156,000. What amount of sales in dollars is needed to produce this target income? If Hudson achieves its target income, what is its margin of safety?
Added by Daniela H.
Step 1
The contribution margin ratio is the percentage of each sales dollar that contributes to covering fixed costs and generating profit. It is calculated by subtracting variable costs from sales and dividing the result by sales. Show more…
Show all steps
Your feedback will help us improve your experience
Rahul Mahato and 91 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
How much sales are required to earn a target net income of $210000 if total fixed costs are $300000 and the contribution margin ratio is 40%? $1135000 $1275000 $750000 $525000
Rahul M.
Watson company has monthly fixed costs of $83,000 and a 40% contribution margin ratio. if the company has set a target monthly income of $15,000, what dollar amount of sales must be made to produce the target income? $207,500 $170,000 $39,200 $245,000 $37,300
Azat N.
start_thought
Aya Bianca I.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD