For Wickham Co., sales is $20,000,000, fixed expenses are $600,000 and the contr
ID: 2553552 • Letter: F
Question
For Wickham Co., sales is $20,000,000, fixed expenses are $600,000 and the contribution margin is 36%. What is the required sales in dollars to earn a net income of $400,000? For Wickham Co., sales is $20,000,000, fixed expenses are $600,000 and the contribution margin is 36%. What is the required sales in dollars to earn a net income of $400,000? For Wickham Co., sales is $20,000,000, fixed expenses are $600,000 and the contribution margin is 36%. What is the required sales in dollars to earn a net income of $400,000?Explanation / Answer
Target contribution margin=Fixed cost+Target profit
=(600,000+400,000)=$10,000,000
Hence required sales=(10,000,000/0.36)
=$2,777,777.78(Approx).