Answered

IDNLearn.com makes it easy to get reliable answers from experts and enthusiasts alike. Ask anything and receive comprehensive, well-informed responses from our dedicated team of experts.

arget Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales. 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be

Sagot :

Parrainidn

Answer: $489,000

Explanation:

Amount of sales required  = (Fixed cost + Desired operating income ) / Contribution margin ratio

Contribution margin ratio for Cover-to-Cover Company:

= Contribution margin / sales

= 77,800/ 389,000

= 20%

Desired operating income = Current income + income increase

= 58,350 + 20,000

= $78,350

Amount of sales required:

= (19,450 + 78,350) / 20%

= $489,000

View image Parrain
Your engagement is important to us. Keep sharing your knowledge and experiences. Let's create a learning environment that is both enjoyable and beneficial. IDNLearn.com has the solutions you’re looking for. Thanks for visiting, and see you next time for more reliable information.