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Sales Needed to Earn Target Income

Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

1. Calculate the sales revenue that Chillmax must make to earn operating income of $81,900 by using the point in sales equation. $

2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1. Enter amounts as positive numbers.

Chillmax Company
Contribution Margin Income Statement
At Point in Sales for Target Income
	Total
Sales	$
Total variable cost
Total contribution margin	$
Total fixed cost
Operating income	$