32 ences E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, Computing Margin of Safety [LO 6-2, 6-3] Erin Shelton, Incorporated, wants to earn a target profit of $990,000 this year. The company's fixed costs are expected to be $1,380,000 and its variable costs are expected to be 75 percent of sales. Erin Shelton, Incorporated, earned $890,000 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 $990,000. 4. Prepare a contribution margin income statement based on sales required to earn a target profit of $990,000. 5. When the company earns $990,000 of net income, what is its margin of safety and margin of safety as a percentage of sales? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Calculate break-even sales for Erin Shelton, Incorporated. Break-Even Sales Required 1 Required 2 >
32 ences E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, Computing Margin of Safety [LO 6-2, 6-3] Erin Shelton, Incorporated, wants to earn a target profit of $990,000 this year. The company's fixed costs are expected to be $1,380,000 and its variable costs are expected to be 75 percent of sales. Erin Shelton, Incorporated, earned $890,000 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 $990,000. 4. Prepare a contribution margin income statement based on sales required to earn a target profit of $990,000. 5. When the company earns $990,000 of net income, what is its margin of safety and margin of safety as a percentage of sales? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Calculate break-even sales for Erin Shelton, Incorporated. Break-Even Sales Required 1 Required 2 >
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11.16E
Related questions
Question
![32
ences
E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, Computing
Margin of Safety [LO 6-2, 6-3]
Erin Shelton, Incorporated, wants to earn a target profit of $990,000 this year. The company's fixed costs are expected to be
$1,380,000 and its variable costs are expected to be 75 percent of sales. Erin Shelton, Incorporated, earned $890,000 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 $990,000.
4. Prepare a contribution margin income statement based on sales required to earn a target profit of $990,000.
5. When the company earns $990,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Required 4
Required 5
Calculate break-even sales for Erin Shelton, Incorporated.
Break-Even Sales
Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff0b5631b-2197-450a-a6bb-2c28f0c98178%2F7a4201d8-33c4-4e50-a666-971cae70e421%2Ff0hnq74_processed.png&w=3840&q=75)
Transcribed Image Text:32
ences
E6-24 (Algo) Computing Target Profit, Preparing Contribution Margin Income Statement, Computing
Margin of Safety [LO 6-2, 6-3]
Erin Shelton, Incorporated, wants to earn a target profit of $990,000 this year. The company's fixed costs are expected to be
$1,380,000 and its variable costs are expected to be 75 percent of sales. Erin Shelton, Incorporated, earned $890,000 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 $990,000.
4. Prepare a contribution margin income statement based on sales required to earn a target profit of $990,000.
5. When the company earns $990,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Required 4
Required 5
Calculate break-even sales for Erin Shelton, Incorporated.
Break-Even Sales
Required 1
Required 2 >
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