Question

Xxx company reports the following contribution margin income statement.

. assume hudson has a target income of $162,000. what amount of sales dollars is needed to produce this target income?

Answer 1

The accounting profit is found by deducting the explicit costs of labor, capital, and materials from the total revenues. The firm's accounting profit is $50,000.

Step-by-step explanation:

To determine the accounting profit, we subtract the total explicit costs from the total revenues. In this instance, the firm had sales revenue of $1 million last year. The costs incurred were $600,000 for labor, $150,000 for capital, and $200,000 for materials.

The accounting profit is calculated as follows:

Accounting Profit = Total Revenues - Explicit Costs

Accounting Profit = $1,000,000 - ($600,000 + $150,000 + $200,000)

Accounting Profit = $1,000,000 - $950,000

Accounting Profit = $50,000