An entertainment company has a net income goal of $19,000/Month. Sales are currently $600,000 annually and fixed costs run $95,000 each year. The company has just launched a new brand campaign that is expected to cost $9,000 monthly and bring in an additional 20% in annual sales. After the launch of the brand campaign, what contribution margin per cent is required to hit the company's income goal? A) 77% B) 40% C) 65% D) 60%
An entertainment company has a net income goal of $19,000/Month. Sales are currently $600,000 annually and fixed costs run $95,000 each year. The company has just launched a new brand campaign that is expected to cost $9,000 monthly and bring in an additional 20% in annual sales. After the launch of the brand campaign, what contribution margin per cent is required to hit the company's income goal? A) 77% B) 40% C) 65% D) 60%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An entertainment company has a net income goal of $19,000/Month. Sales are currently $600,000 annually and fixed costs run $95,000 each year. The company has just launched a new brand campaign that is expected to cost $9,000 monthly and bring in an additional 20% in annual sales. After the launch of the brand campaign, what contribution margin per cent is required to hit the company's income goal?
A) 77%
B) 40%
C) 65%
D) 60%
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