E6-22 Computing Target Profit, Preparing Contribution Margin Income Statement, Computing Margin of Safety [LO 6-2, 6-3]

E6-22 Computing Target Profit, Preparing Contribution Margin Income Statement, Computing Margin of Safety [LO 6-2, 6-3] Erin Shelton, Inc., wants to earn a target profit of $850,000 this year. The company's fixed costs are expected to be Sl , 100,000 and its variable costs are expected to be 60 percent ot sales. Erin Shelton, Inc., earned S750,OOO in profit last year. Required: 1. Calculate break-even sales tor Erin Shelton, Inc. ak-Even Sal 2. Prepare a contribution margin income statement on the basis break-even sales. (Do not leave any cells blank, enter a zero wherever required.) ontribution Margin Income Statement Contribution Margin p milt 3. Calculate the required sales to meet the target profit of $850,000 rget Sales