Answer the following question(s)using the information below.
Kaiser's Kraft Korner sells a single product.7,000 units were sold resulting in $70,000 of sales revenue,$28,000 of variable costs,and $12,000 of fixed costs.
-Following is the Becker Company Ltd.partial income statement for the most recent year:

What would the Becker Company sales have to be in order for the company to have an operating income of $500,000?

Question

Answer the following question(s)using the information below.
Kaiser's Kraft Korner sells a single product.7,000 units were sold resulting in $70,000 of sales revenue,$28,000 of variable costs,and $12,000 of fixed costs.
-Following is the Becker Company Ltd.partial income statement for the most recent year:

What would the Becker Company sales have to be in order for the company to have an operating income of $500,000?

Quizplus · Accepted Answer

To find the sales revenue needed for a $500,000 operating income, we need to use the formula: 
Operating Income = Sales Revenue - Variable Costs - Fixed Costs

We know that variable costs were $28,000 and fixed costs were $12,000. 
So: 
$500,000 = Sales Revenue - $28,000 - $12,000 
$500,000 + $40,000 = Sales Revenue 
$540,000 = Sales Revenue

Therefore, the sales revenue needed for a $500,000 operating income is $540,000 or 5400 units sold.

Now we need to choose the answer choice that corresponds to a sales revenue of $540,000 in the Becker Company Ltd. income statement. 
From the income statement: 
Operating Income = $380,000 
So, we need to add $120,000 to the operating income. 
Sales Revenue for $120,000 Additional Operating Income = $1,796,667

Therefore, the answer is A: $1,796,667.

Answer the Following Question(s)using the Information Below