E6-24 (Algo) 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 $960,000 this year. The company's fixed costs are expected to be $1,320,000 and its variable costs are expected to be 40 percent of sales. Erin Shelton, Inc., earned $860,000 in profit last year. Required: 1. Calculate break-even sales for Erin Shelton, Inc. 2. Prepare a contribution margin income statement on the basis break-even sales. 3. Calculate the required sales to meet the target profit of $960,000. 4. Prepare a contribution margin income statement based on sales required to earn a target profit of $960,000. 5. When the company earns $960,000 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 the required sales to meet the target profit of $960,000. Target Sales