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Social Science Clinic => Accounting => Topic started by: karen on Jan 5, 2020

Title: Checkerbox Company has a predicted operating income of $97,500.Their total variable expenses are ...
Post by: karen on Jan 5, 2020

Checkerbox Company has a predicted operating income of $97,500.
Their total variable expenses are $42,000 and their total fixed expenses are $96,000.  They have a unit contribution margin of $15.

1.	Calculate the required sales in units to achieve the predicted operating income.

2.	Calculate the required sales in units to achieve the predicted operating income if the company's

fixed expenses double from $96,000 to $192,000.

Title: Checkerbox Company has a predicted operating income of $97,500.Their total variable expenses are ...
Post by: Kdiggy on Jan 5, 2020

1.

Total fixed costs	$96,000
Predicted operating income	$97,500
​	$193,500
Divide by	Divide by
Unit contribution margin	$15.00
Unit sales needed to reach target income	12,900

2.

New fixed costs	$192,000
Predicted operating income	$97,500
​	$289,500
Divide by	Divide by
Unit contribution margin	$15.00
Unit sales needed to reach target income at new level of fixed costs	19,300