Facey Incc. earned operating income of $150,000 during 2016. The company wants to earn operating income of $200,000 during 2017. Its fixed costs are expected to be $40,000, and variable costs are expected to be 26% of sales.

Instructions

(a) Determine the required sales to meet the target operating income during 2017., show workings- (3 Marks)

(b) Fill in the dollar amounts for the summary income statement for 2017 below based on your answer to part A. (5 Marks)