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Using the Contribution Margin method of computing target operating income, calculate the desired (target) operating income...

Using the Contribution Margin method of computing target operating income, calculate the desired (target) operating income using the following:

-If the desired (target) operating income is $6,400.

-Unit price for sales is $400.

-Variable cost per unit is $240.

-Total fixed cost is $8,000.

Units Per Unit
Sold Cost Amount
Revenue
Variable Costs
Contribution Margin
Fixed Costs
Operating Income
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Answer #1
Units sold = ( Target operating income + Total fixed costs ) / ( Unit sales price - variable cost per unit ) = ( 6400 + 8000 ) / ( 400 - 240 ) 90
Units sold Per unit cost Amount
Revenue 90 400 36000
Variable cost 240 21600
Contribution margin 160 14400
Fixed costs 8000
Operating income 6400
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