3 4 Target Operating Income Using the Contribution Margin Method 7 A target operating income contribution computation allows the manager 8 to determine how many procedures must be performed in order to yield a 9 particular operating income. 20 11 The formula to compute this is: 12 13 N= Fixed Costs + Target Operating Income Contribution Margin Per Unit 15 15 Assumptions: 17 28 19 I! A. Desired (target) operating income = B. Revenue per Procedure C. Variable Cost Per Unit D. Total Fixed Cost $ $ $ $ 4,370 185 92 5,200 20 = 21 II 22 23 24 Calculate the Target Operating Income 25 26