Ursula's Toy Manufacturing makes aluminum serving carts for use in their underwater submarine rides. During 2013, the following costs were incurred:

PERCENT PERCENT

AMOUNT FIXED VARIABLE

Direct material $440,000 100

Direct labor 90,000 100

Variable manufacturing overhead 70,000 100

Fixed manufacturing overhead 800,000 100

Selling costs 950,000 45 55

Administration costs 570,000 85 15

Sales for 2014 totaled $3,164,000 and there were no beginning and ending inventories.

Required:

ALL CALCULATIONS MUST BE SHOWN

1. Prepare a contribution income statement for the year ended December 31, 2013.
2. Determine the sales required to break even.
3. Determine the sales required to make a $420,000 profit per year.