Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

1. Calculate the sales revenue that Chillmax must make to break even by using the breakeven point in sales equation.

2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.