Required sales in dollars to meet a target net income is computed by dividing
A) fixed costs plus target net income by contribution margin per unit.
B) variable costs plus target net income by contribution margin per unit.
C) fixed costs plus target net income by contribution margin ratio.
D) total costs plus target net income by contribution margin ratio.

Question

Quizplus · Accepted Answer

The required sales in dollars to meet a target net income is calculated by dividing the sum of fixed costs and target net income by the contribution margin ratio.

Required Sales in Dollars to Meet a Target Net Income