Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,900 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Income $ 2,227,500 1,782,000 445,500 342,000 $ 103,500 Exercise 21-12 (Algo) Target income and margin of safety LO C2 1. Assume Hudson has a target income of $165,000. What amount of sales (in dollars) is needed to produce this target income 2. If Hudson achieves its target income, what is its margin of safety (in percent)?
Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,900 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Income $ 2,227,500 1,782,000 445,500 342,000 $ 103,500 Exercise 21-12 (Algo) Target income and margin of safety LO C2 1. Assume Hudson has a target income of $165,000. What amount of sales (in dollars) is needed to produce this target income 2. If Hudson achieves its target income, what is its margin of safety (in percent)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Hudson Company reports the following contribution margin income statement.
HUDSON COMPANY
Contribution Margin Income Statement
For Year Ended December 31.
Sales (9,900 units at $225 each)
Variable costs (9,900 units at $180 each)
Contribution margin
Fixed costs
Income
Exercise 21-12 (Algo) Target income and margin of safety LO C2
1. Assume Hudson has a target income of $165,000. What amount of sales (in dollars) is needed to produce this target income?
2. If Hudson achieves its target income, what is its margin of safety (in percent)?
Note: Round your answer to 1 decimal place.
1. Dollar sales for target income
2. Margin of safety
$ 2,227,500
1,782,000
445,500
342,000
$ 103,500
%
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