Mastery Problem: Target Income and Margin of Safety Target Income and Margin of Safety At the breakaeven polnt, sales and costs are exactly equal. However, the goal of most companies is to make a proflt. When a company decides that lt wants to earn more than the breakeven pomt of income, it must define the amount it thinks lt will realistically make. By modifying the break-even equation, the sales required to earn a target or desired amount of profit may be computed. Complete the followmg: If a company makes $5 off of each unlt it sells and has a target operating income of $5,000, then it must sell :] units. Similarly, ifa company has a target operating income of 575,000 and knows that total expenses for the penod will be $75,000, how much revenue must lt earn to reach its target operating income? 5:] Units sold or revenue earned above and beyond the breakeven pomt contributes to the margin of safety for a company. Margin of safety is a crude measure of rlsl