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QUESTION 2 (10 MARKS) Presto Company makes radios that sell for $30 each. For the coming year, management expects fixed costs to total $220,000 and
QUESTION 2 (10 MARKS) 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. (4 MARKS) B. Compute the MARGIN OF SAFETY RATIO assuming actual sales are $800,000. (2 MARKS) C. Compute the SALES DOLLARS REQUIRED to EARN A NET INCOME OF $140,000 (4 MARKS)
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