Enter a formula in cell F$7$ that calculates the Sales Target in Units which is needed to achieve the net operating income of $$60,000.$ The formula should first add the target profit in cell F$15$ to the total fixed costs in cell C$14.$ This result should be divided by the contribution margin per unit in cell F$11.$

Enter a formula in cell F$6$ that calculates the Sales Target in Dollars which is needed to achieve the net operating income of $$60,000.$ The formula should first add the target profit in cell F$15$ to the total fixed costs in cell C$14.$ This result should be divided by the contribution margin ratio in cell F$10.$ The results show that based on the contribution format income statement for $2019,$ in order for the company to achieve $$60,000$ in net operating income, sales revenue must be $$436,721.$ Sales in units must be $6,612.$ These results will change from year to year as the cost and sales data change.

Change the year in cell B$1$ to $2020.$ Notice the company is showing a loss of $(12,106)$ with sales revenue at $$408,125.$

Change the value in cell F$15$ to zero. Notice the Sales Target in Dollars $$437,554.$ This is known as the break$-$even point. In order for the company to break$-$even with a net operating income of zero, the sales revenue must be $$437,554.$ Note the sales revenue for $2020$ is lower than this value which is why the net operating income is less than zero.