Target Operating Income Using the Contribution Margin Method A target operating income contribution computation allows the manager to determine how many procedures must be performed in order to yield a particular operating income. The formula to compute this is: 2 3 N= Fixed Costs + Target Operating Income Contribution Margin Per Unit 5 6 Assumptions: 7 9 A. Desired (target) operating income B. Revenue per Procedure C. Variable Cost Per Unit D. Total Fixed Cost $ $ $ $ 4,370 185 92 5,200 O 02 23 24 Calculate the Target Operating Income 25 26 27 28 29 30 31