Calculate the break even sales

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Reference no: EM131292913

Erin Shelton, Inc., wants to earn a target profit of $800,000 this year. The company’s fixed costs are expected to be $1,000,000 and its variable costs are expected to be 60 percent of sales. Erin Shelton, Inc., earned $700,000 in profit last year.

1. Calculate the break even sales.

2. Calculate target sales to meet profit of 800,000.

3. When the company earns $800,000 of net income, what is its margin of safety and margin of safety as a percentage of sales?

Reference no: EM131292913

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