4. Angelo Company developed the following information for the product it sells:

Sales price per unit $120

Fixed expenses:

Cost of goods sold $1,500,000

Selling expense $800,000

Administrative expense $500,000

Variable expenses:

Selling expense 40% of sales price

Cost of goods sold $40 per unit

Administrative expense $8 per unit

For the year ended December 31, 2019, the company produced and sold 200,000 units of

product.

Instructions:

(a) Prepare a CVP income statement using the contribution margin format.

(b) Compute the break-even point in units and in dollars.

(c) Compute the margin of safety in dollars and margin ratio.

(d) By using contribution margin ratio, determine the sales dollars required to earn net

income of $3,000,000.