The Following Information Describes a Product Expected to Be Produced

Essay

The following information describes a product expected to be produced and sold by Garr Company:
Selling price……………………………………… $80 per unit
Variable costs…………………………………… $32 per unit
Total fixed costs………………………………… $630,000
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?