Aussie Travel uses the contribution margin income statement internally.

Aussie's first quarter results are asfollows:

_{Aussie Travel}

_{Contribution Margin Income Statement}

_{Three Months Ended March 31}

_{Sales revenue}

_$

_425,000

_{Less: Variable expenses}

_85,000

_{Contribution margin}

_$

_340,000

_{Less: Fixed expenses}

_170,000

_{Operating income}

_$

_170,000

Aussie's relevant range is sales of between $130,000 and $675,000.

Requirements:

1. Prepare contribution margin income statements at sales levels of $170,000 and $420,000. (Hint: Use the contribution marginratio.)

2.Compute breakeven sales in dollars.