Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variablecost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed costequals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required:1. Calculate the sales revenue that Chillmax must make to earn operating income of $81,900by using the point in sales equation.2. Check your answer by preparing a contribution margin income statement based on thesales dollars calculated in Requirement 1.Brief Exercise 7-30 Break-Even Point in U
Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variablecost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed costequals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required:1. Calculate the sales revenue that Chillmax must make to earn operating income of $81,900by using the point in sales equation.2. Check your answer by preparing a contribution margin income statement based on thesales dollars calculated in Requirement 1.Brief Exercise 7-30 Break-Even Point in U
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...
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Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variable
cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost
equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense).
Required:
1. Calculate the sales revenue that Chillmax must make to earn operating income of $81,900
by using the point in sales equation.
2. Check your answer by preparing a contribution margin income statement based on the
sales dollars calculated in Requirement 1.
Brief Exercise 7-30 Break-Even Point in U
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