Target Operating Income

Acme Medical Supply Company desires a target operating income amount of $100,000, with assumption inputs as follows:

• Desired (target) operating income amount = $100,000
• Unit price for sales = $80
• Variable cost per unit = $60
• Total fixed cost = $60,000

Compute the target operating income and compute a contribution income statement to prove the totals.

Be sure to cover the following in your contribution income statement:

• Revenue
• Variable costs
• Contribution margin
• Fixed costs
• Desired (Target) Operating Income =