Units to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at...
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Accounting
Units to Earn Target Income
Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense).
Required:
1. Calculate the number of pairs of shoes Chillmax must sell to earn operating income of $81,900.
2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.
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