After conducting a market research study, Magnificent 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 $250. The annual target sales volume for interior doors is 28,000. Magnificent has target operating income of 40% of sales.
What is the target operating income?

Question

Quizplus · Accepted Answer

Estimated sales revenue = $250 × 28,000 units = $7,000,000.
Target operating income = $7,000,000 × 40% = $2,800,000.

After Conducting a Market Research Study, Magnificent Manufacturing Decided to Produce