Answered

Westonci.ca offers quick and accurate answers to your questions. Join our community and get the insights you need today. Discover a wealth of knowledge from professionals across various disciplines on our user-friendly Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

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 :

Parrain

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
Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.