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Erin Shelton, Incorporated, wants to earn a target profit of $890,000 this year. The companys...

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Accounting

Erin Shelton, Incorporated, wants to earn a target profit of $890,000 this year. The companys fixed costs are expected to be $1,180,000 and its variable costs are expected to be 75 percent of sales. Erin Shelton, Incorporated, earned $790,000 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 $890,000. Prepare a contribution margin income statement based on sales required to earn a target profit of $890,000. When the company earns $890,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?

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