Hi Yousuf,
Thank you for your interesting question. Since I'm a beginner to this CMA program, Please don't mistaken me if i make any wrong judgments on my calculation.
Here is the answer and my supporting calculation. Please correct me if I'm wrong #
Correct answer is A.12,00,000
IF Sales is 12,00,000 then Variable Cost is ( 12,00,000 - 12,00,000*30%) i.e Sales(12,00,000) - Variable Cost(8,40,000) = Contribution Margin = 3,60,000 (30% of Sales)
Next, C.M - Fixed cost = 3,60,000 - 2,40,000 = 1,20,000
1,20,000 - 1,20,000 * 40% (Tax - Tax rate) = 72,000
72,000 is 6% of Sales
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JAGAN MANIKANDAN
Accountant
DUBAI
United Arab Emirates
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Original Message:
Sent: 06-22-2019 03:55 AM
From: Yousuf Syed
Subject: Target income - cvp
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Yousuf Syed
Accountant
Jeddah
Saudi Arabia
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