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).

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

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.