Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 3 - Cost-Volume-Profit Analysis - Assignment Material - Problems - Page 99: 3-34(2)

Answer

Number of children needed for target operating income = (4,000 + 5,000) $\div$ 250 = 36 children

Work Step by Step

Number of Children for Target Operating Income = (Fixed Costs + Target Operating Income) $\div$ Contribution Margin per Child Target Operating Income = 5,000 Contribution Margin per Child = 250
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