Stewart Company management predicts that it will incur fixed costs of $230,000 and earn pretax income of $350,000 in the next period Its expected contribution margin ratio is 25 Use this information to compute the amounts of (1) Total dollar sales and (2) Total variable costs ...

1 Fixed costs Target pretax income Dollar sales Contr ...

Stewart Company management predicts that it will incur fixed costs of $230,000 and earn pretax income of

Question:

Stewart Company management predicts that it will incur fixed costs of $230,000 and earn pretax income of $350,000 in the next period. Its expected ratio is 25%. Use this information to compute the amounts of
(1) Total dollar sales and
(2) Total variable costs.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...