Question:
The mathematical equation for computing required sales to obtain target net income is:
Required sales =
a. Variable costs + Target net income.
b. Variable costs + Fixed costs + Target net income.
c. Fixed costs + Target net income.
d. No correct answer is given.
Marshall Company had actual sales of $600,000 when break-even sales were $420,000. What is the margin of safety ratio?
a. 25%.
b. 30%.
c. 33 1/3%.
d. 45%.