How much sales are required to earn a target income of 160000 if total fixed

# How much sales are required to earn a target income

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132.How much sales are required to earn a target income of \$160,000 if total fixed costs are\$200,000 and the contribution margin ratio is 40%? a.\$600,000b.\$400,000c.\$900,000d.\$660,000Ans: C, LO: 7, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC:Problem Solving, IMA: Quantitative MethodsSolution: (\$160,000 \$200,000) / .4 \$900,000 133.Farmers’ Industries has fixed costs of \$400,000 and variable costs are 60% of sales. Howmuch will Farmers report as sales when its net income equals \$40,000? 134.Murphy Company produces flash drives for computers, which it sells for \$20 each. Eachflash drive costs \$8 of variable costs to make. During April, 700 drives were sold. Fixedcosts for April were \$4 per unit for a total of \$2,800 for the month. How much doesMurphy’s operating income increase for each \$1,000 increase in revenue per month? \$600 18 - 26
Cost-Volume-Profit 135.Greg’s Golf Carts produces two models: Model 24 has sales of 500 units with acontribution margin of \$40 each; Model 26 has sales of 350 units with a contributionmargin of \$50 each. If sales of Model 26 increase by 100 units, how much will profitchange? 136.Wendy Industries produces only one product. Monthly fixed expenses are \$12,000,monthly unit sales are 2,500, and the unit contribution margin is \$10. How much ismonthly net income? a.\$25,000b.\$37,000c.\$0d.\$13,000Ans: D, LO: 7, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC:Problem Solving, IMA: Quantitative MethodsSolution: (\$10 \$2,500) \$12,000 \$13,000 137.A company desires to sell a sufficient quantity of products to earn a profit of \$300,000. Ifthe unit sales price is \$20, unit variable cost is \$12, and total fixed costs are \$600,000,how many units must be sold to earn net income of \$300,000?

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