An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is:

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is:

Target income analysis.

Cost-volume-profit analysis.

Least-squares regression analysis.

Variance analysis.

Process costing.

During March, a firm expects to its total sales to be $160,000, its total variable costs to be $95,000, and its total fixed costs to be $25,000. The contribution margin for March is:

$65,000.

$90,000.

$120,000.

$40,000.

$25,000.

Contribution margin = Sales - Variable costs
$160,000 - $95,000 = $65,000

A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The total contribution margin is:

$55,000.

$90,000.

$125,000.

$150,000.

$380,000.

Contribution margin = Sales - Variable costs
(25,000 * $11) - (25,000 * $6) = $125,000

A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The pretax net income is:

$55,000.

$90,000.

$125,000.

$150,000.

$380,000.

Pretax net income = Sales - Variable costs - fixed costs
(25,000 * $11) - (25,000 * $6) - $70,000 = $55,000

Watson Company has monthly fixed costs of $83,000 and a 40% contribution margin ratio. If the company has set a target monthly income of $15,000, what dollar amount of sales must be made to produce the target income?

$245,000

$207,500

$37,300

$170,000

$39,200

(Fixed costs + Target income)/Contribution margin ratio = Dollar sales at target income
($83,000 + $15,000)/.40 = $245,000 Sales