Key Company has a targeted sales volume of 62,300 units.Total fixed costs are $31,200.The contribution margin per unit is $1.20.What is targeted net income?
A) $31,200
B) $37,440
C) $43,560
D) $74,760

Question

Quizplus · Accepted Answer

The formula for targeted net income is:

Targeted Net Income = (Targeted Sales Volume x Contribution Margin per Unit) - Total Fixed Costs

Substituting the given values, we get:

Targeted Net Income = (62,300 x $1.20) - $31,200
Targeted Net Income = $74,760 - $31,200
Targeted Net Income = $43,560

Hence, the correct answer is choice C, $43,560.

Key Company Has a Targeted Sales Volume of 62,300 Units