0 Required Informatlon The following information applies to the questions displa

Question

0 Required Informatlon The following information applies to the questions displayed below Hudson Co. reports the contribution margin income statement for 2017. HUDSON Co. Contribution Margin Income Statement For Year Ended December 31, 2817 Sales (18,780 units at $388 each) Variable costs (1,70 units at $248 each) Contribution margin Fixed costs Pretax income $3,218,8e 2,568,8e0 S 642,8e 584,808 $ 138, 8e8 1. Assume Hudson Co. has a target pretax income of $161,000 for 2018. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2018, what is its margin of safety (in percent)? (Round your answer to 1 declmal place. 1. Amount of sales 2. Margin of safety

Explanation / Answer

CM ratio = 642000/3210000= 20% 1 Amount of sales = (504000+161000)/20%= $3325000 2 Break even sales = 504000/20%= $2520000 Margin of safety = (3325000-2520000)/3325000= 24.2%

Related Questions

Navigate

• Browse (All)
• Browse
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.