Question - Hudson Co. reports the contribution margin income statement for 2015.
HUDSON CO. Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (8,700 units at $340 each) $ 2,958,000
Variable costs (8,700 units at $221 each) 1,922,700
Contribution margin $ 1,035,300
Fixed costs 809,200
Pretax income $ 226,100
a) Assume Hudson Co. has a target pretax income of $154,000 for 2016. What amount of sales (in dollars) is needed to produce this target income?
b) If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)?