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

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

A) CM% = ($1,190,000 - $476,000 - $357,000)/$1,190,000 = 30%
($39,000 + $500,000)/0.3 = $1,796,667

Kaiser's Kraft Korner Sells a Single Product