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43. In 2014, Stone Balloon had the following information: Variable Costs $50,000 Fixed Costs $20,000 Net...

43. In 2014, Stone Balloon had the following information:

Variable Costs $50,000

Fixed Costs $20,000

Net Income $10,000

What is the annual sales volume required for them to have a before-tax income of 30,000?
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Answer #1
Total Sales revenue = Total cost + Net Income
(50000+20000) + 10000 = 80,000
Total contribution = Fixed cost t+ Net income
20000+10000 = 30000
CM ratio = Contribution / sales revenue
30,000 /80,000 *100 = 37.50%
Fixed cost 20000
Add: Target before tax income 30000
Total Target contribution 50000
Divide: CM ratio 37.50%
Annual Target sales in $ 133333.3
Answer is $ 133,333
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