The Dollar Amount of Sales Needed to Achieve a Target

question 216

True/False

The dollar amount of sales needed to achieve a target income is computed by dividing the sum of fixed costs plus the target pretax income by the contribution margin ratio.

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Definitions:

Forming Department

A manufacturing sector focused on shaping or structuring materials into their desired forms.

Assembly Department

A division within a manufacturing plant where components are assembled into final products.

Direct Labor-Hours

The total number of hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Machine-Hours

Machine-hours refer to the total time that machinery is operated within a specific period, used as a basis for allocating costs or assessing productivity.