Target Net Income: Definition & Formula


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question 1 of 3

Which of the following will give you the target net income?

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1. How is the contribution margin calculated?

2. How much in sales do you need to get to meet a target net income of $750 if your variable costs are $250 and your fixed costs are $100?

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About This Quiz & Worksheet

As you work through the worksheet and quiz, you'll get a better idea of how much you know about calculating target net income. Some terms that you will need to define for the quiz include variable cost and contribution margin.

Quiz & Worksheet Goals

Using these tools helps you test your knowledge of:

  • Contribution margin
  • Variable costs
  • Definition of target net income
  • Target net income formula

Skills Practiced

  • Defining key concepts - ensure that you can accurately define main phrases, such as variable cost and contribution margin
  • Information recall - access the knowledge you have gained regarding the meaning of target net income
  • Knowledge application - use your knowledge to identify the formula used for target net income

Additional Learning

Further improve your understanding of these economic principles by reviewing the lesson Target Net Income: Definition & Formula. You can use this lesson to cover these additional topics:

  • Examples of calculating target net income
  • Differences between variable cost and fixed cost
  • Purpose of finding the target net income