Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10,000 units at $625 each) Variable costs (10,000 units at $525 each) Contribution margin Fixed costs Pretax income Amount of sales $ 6,250,000 5,250,000 $ 1,000,000 233,200 1. Assume Hudson Co. has a target pretax income of $166,000 for 2016. What amount of sales (in dollars) is needed to produce this target income? % $766,800 2. If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) Margin of safety
Hudson Co. reports the contribution margin income statement for 2015. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10,000 units at $625 each) Variable costs (10,000 units at $525 each) Contribution margin Fixed costs Pretax income Amount of sales $ 6,250,000 5,250,000 $ 1,000,000 233,200 1. Assume Hudson Co. has a target pretax income of $166,000 for 2016. What amount of sales (in dollars) is needed to produce this target income? % $766,800 2. If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) Margin of safety
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:Hudson Co. reports the contribution margin income statement for 2015.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (10,000 units at $625 each)
Variable costs (10,000 units at $525 each)
Contribution margin
Fixed costs
Pretax income
Amount of sales
$ 6,250,000
5,250,000
$ 1,000,000
233,200
1. Assume Hudson Co. has a target pretax income of $166,000 for 2016. What amount of sales (in
dollars) is needed to produce this target income?
%
$766,800
2. If Hudson achieves its target pretax income for 2016, what is its margin of safety (in percent)? (Round
your answer to 1 decimal place.)
Margin of safety
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education