Question: Erin Shelton, Incorporated, wants to earn a target profit of $950,000 this year. The company's fixed costs are expected to be $1,300,000 and its variable

Erin Shelton, Incorporated, wants to earn a target profit of $950,000 this year. The company's fixed costs are expected to be $1,300,000 and its variable costs are expected to be 60 percent of sales. Erin Shelton, Incorporated, earned $850,000 in profit last year. Required: 1. Calculate break-even sales for Erin Shelton, Incorporated. 2. Prepare a contribution margin income statement on the basis of break-even sales. 3. Calculate the required sales to meet the target profit of $950,000. 4. Prepare a contribution margin income statement based on sales required to earn a target profit of $950,000. 5. When the company earns $950,000 of net income, what is its margin of safety and margin of safety as a percentage of sales

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