Question
Erin Shelton, Inc., wants to earn a target profit of $850,000 this year. The companys fixed costs are expected to be $1,100,000 and its variable
Erin Shelton, Inc., wants to earn a target profit of $850,000 this year. The companys fixed costs are expected to be $1,100,000 and its variable costs are expected to be 60 percent of sales. Erin Shelton, Inc., earned $750,000 in profit last year.
1- calculate the break-even for Erin shelton, Inc. 2-prepare a contribution margin statement on the basis of break-even sales 3-calculate the required sales to meet the target profit $850000 4-Using a contribution margin income statement format with sales to meet the target profit of $850000 5-when the company earns $850000 of net income, what is its margin of safety and margin of safety as a percentage of sales. |
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