Another useful method for figuring out the type of performance your company WI\" need to reach a target income is by using sales revenue. Rather than using the number of units, this method uses total sales revenue. In companies for which the total set of goods produced and sold is more varied. this would be Hie preferred method, as opposed to a business in which only one produd is sold. Assume a company has pricing and cost information as follows: Price and Cost llllormatioll Amount Selling Price per Unit $20 Variable Cost per Unit $10 Total Fixed Cost sumo For the upcoming period, the company wishes to generate operating income of $75,000. Given the cost and pricing structure for the company's product, how much sales revenue must it generate to attain its target income? Step 1: Calculaie the collh'ihutioll margin mtin: The contribution margin ratio is the contribution margin in proportion to the selling price on a per-unit basis. {Selling Price 7 Variable Cost) Contribution Margin Ratio : Selim Pnce Mate: The centriouoan margin ratio is calculated to one decimal place.) _ V' cm: Contribution Margin Ratio : : :] step 2: Calculate the sales revenue required to attain the target income: (Target Income + Fixed Cost) Sales Dollars = Contribution Margin Ratio ($[:] +$12,ooo) 5aiee Dollars : E : E step 3: Create a contribution margin income statement, to check your previous work. Enter all amounts as pcs ve numbers. Sales Total variable expense Total contribution margin Total xed expense HUM Operating income