The following information is for Kinsner Corporation: $\begin{array}{lr}
\text { Total fixed costs } & \$ 313,500 \
\text { Variable costs per unit } & \$ 99 \
\text { Selling price per unit } & \$ 154
\end{array}$ If management has a targeted net income of $59,400 ignore income taxes), then sales revenue should be _____.
A)$580,067
B)$1,044,120
C)$239,721
D)$671,220

Question

Quizplus · Accepted Answer

To find the sales revenue needed to achieve the targeted net income, we first calculate the contribution margin per unit, which is the selling price per unit minus the variable cost per unit: $154 - $99 = $55. Then, we calculate the total contribution margin needed to cover fixed costs and achieve the targeted net income: $313,500 (fixed costs) + $59,400 (targeted net income) = $372,900. To find the required sales revenue, we divide the total contribution margin needed by the contribution margin per unit and multiply by the selling price per unit: ($372,900 / $55) * $154 = $1,044,120.

The Following Information Is for Kinsner Corporation If Management Has a Targeted Net Income of $59,400 Ignore