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Erin Shelton, Incorporated, wants to earn a target profit of $960,000 this year. The companys...

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Accounting

Erin Shelton, Incorporated, wants to earn a target profit of $960,000 this year. The companys fixed costs are expected to be $1,320,000 and its variable costs are expected to be 40 percent of sales. Erin Shelton, Incorporated, earned $860,000 in profit last year.
Required:
Calculate break-even sales for Erin Shelton, Incorporated.
Prepare a contribution margin income statement on the basis of break-even sales.
Calculate the required sales to meet the target profit of $960,000.
Prepare a contribution margin income statement based on sales required to earn a target profit of $960,000.
When the company earns $960,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?

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