Kreter Inc. earned net income of $300000 last year. This year it wants to earn net income of $450000. The company's fixed costs are expected to be $300000 and variable costs are expected to be 70% of sales.
Instructions
(a) Determine the required sales to meet the target net income of $450000 using the mathematical equation.
(b) Using a CVP income statement format prove your answer.

Question

Quizplus · Accepted Answer

The Answer of Kreter Inc. earned net income of $300000 last year. This year it wants to earn net income of $450000. The company's fixed costs are expected to be $300000 and variable costs are expected to be 70% of sales.
Instructions
(a) Determine the required sales to meet the target net income of $450000 using the mathematical equation.
(b) Using a CVP income statement format prove your answer.