Answer the following questions using the information below:
After conducting a market research study, Ed Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $240. The annual target sales volume for interior doors is 20,000. Ed has target operating income of 20% of sales.
-What is the target operating income?
A) $960,000
B) $3,840,000
C) $4,800,000
D) $5,760,000

Question

Quizplus · Accepted Answer

The target operating income is calculated by multiplying the target operating margin by the target sales. Therefore, the target operating income is $960,000 ($12,000,000 x 8%).

Answer the Following Questions Using the Information Below