Acme Medical Supply desires a target operating income amount of $100,000 with the assumptions listed below.
Assumptions:
Desired (target) operating income amount: 100,000
Unit price for sales: 80
Variable cost per unit: 60
Total fixed cost: 60,000
Calculate the required revenue to achieve the target operating income:
Complete the Contribution Income Statement to prove the totals:
Revenue: 640,000
Variable cost: 480,000
Contribution margin: 160,000
Fixed costs: 60,000
Target operating income: 100,000
Number of unites needed: 640,000
(1) The number of units needed to be sold in order to attain $100,000 in net income.
(2) The number of units needed to be sold in order to break even.