Presto Company makes radios that sell for $30 each. For the coming year, management expects fixed costs to total $220,000 and variable costs to be $18 per unit.

(a) Compute the break-even point in dollars using the contribution margin (CM) ratio.

(b) Compute the margin of safety ratio assuming actual sales are $800,000.

(c) Compute the sales dollars required to earn net income of $140,000.

AppendixLO1