Grissom Company estimates that variable costs will be 60% of sales, and fixed costs will total $800,000.The
Question:
Grissom Company estimates that variable costs will be 60% of sales, and fixed costs will total $800,000.The selling price of the product is $4.
Instructions
(a) Prepare a CVP graph, assuming maximum sales of $3,200,000. (Note: Use $400,000 increments for sales and costs and 100,000 increments for units.)
(b) Compute the break-even point in (1) units and (2) dollars.
(c) Compute the margin of safety in (1) dollars and (2) as a ratio, assuming actual sales are $2.5 million.
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a b 1 Breakeven sales in units 4X 240X 800000 160X 800...View the full answer
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Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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