Jagswear, Inc. earned operating income of $93,000 during 2016. The company wants

Question

Jagswear, Inc. earned operating income of $93,000 during 2016. The company wants to earn operating income of $141,000 during 2016 Its fixed costs are expected to be $57,800, and variable costs are expected to be 30% of sales. Determine the required sales to meet the target operating income during 2016. Required sales Fill in the dollar amounts for the summary income statement for 2016 below based on your answer to part A. Sales revenue Variable costs Contribution margin Fixed costs Operating income

Explanation / Answer

1) Required sales = ($141,000 + $57,800) / 0.70 = $284,000

2)

Sales revenue $284,000 Varaible costs $85,200 Contribution margin $198,800 Fixed costs $57,800 Operating income $141,000

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