Meriden company has a unit selling price
In order for Turgo Company to achieve management’s target net income of $62,875, they would need to have sales of $360,500. This can be calculated using the following formula: Fixed Costs + Target Net Income / (1 – Variable Cost %) = Required Sales.
Using this equation we get: 176,700 + 62,875 / (1 – 0.65) = 360,500. This means that Turgo Company must generate total sales of at least $360,500 in order achieve their desired net income goal of $62,875. It is important note that these figures are based upon certain assumptions such as variable costs being 65% and fixed costs being static; if either one those variables changes then required sales might change accordingly depending on magnitude difference between original targets and new ones provided by management.