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Sam Company estimates that variable costs will be 60% of sales, and fixed cost will total $800,000. The selling price of the product is $10
Sam Company estimates that variable costs will be 60% of sales, and fixed cost will total $800,000. The selling price of the product is $10 per unit. Instructions: (10 Marks) 1. Compute the break-even point in (a) units and (b) dollars sales. 2. Compute the margin of safety in (a) dollars and (b) as a ratio, assuming actual sales are $2.5 million. 3. 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.)
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