The Following Information Describes a Product Expected to Be Produced

Essay

The following information describes a product expected to be produced and sold by Garrison Company:
$\begin{array}{llr} \text { Selling price } & \text { \$ 80 per unit } \\ \text { Variable costs } & \text { \$ 32 per unit } \\ \text { Total fixed costs } &\$ 630,000\end{array}$

Required:
(a) Calculate the contribution margin ratio.
(b) Calculate the break-even point in dollar sales.
(c) What dollar amount of sales would be necessary to achieve a pretax income of $120,000?