For Wickham Co., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%.What is required sales in dollars to earn a target net income of $400,000?
A)$1,111,111
B)$1,666,666
C)$2,777,778
D)$5,555,556

Question

Quizplus · Accepted Answer

To find the required sales to achieve a target net income, use the formula: Required Sales = (Fixed Expenses + Target Net Income) / Contribution Margin Ratio. Here, Required Sales = ($600,000 + $400,000) / 0.36 = $2,777,778.