Indigo Industries has fixed costs of $180,000 and contribution margin is 40% of sales. How much will Indigo report as sales when its net income equals $60,000?
A) $150,000
B) $300,000
C) $450,000
D) $600,000

Question

Quizplus · Accepted Answer

(Fixed costs + Target Net Income / Contribution Margin Ratio = Sales to for target net income = ($180,000 + $60,000) / 40% = $600,000

Indigo Industries Has Fixed Costs of $180,000 and Contribution Margin