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  3. e22.17(lo 4,5), ap glacial company estimates that

E22.17(LO 4,5), AP Glacial Company estimates that variable costs will be 62.5% of sales, and...

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Question

Accounting

E22.17(LO 4,5), AP Glacial Company estimates that variable costs will be 62.5% of sales, and fixed costs will total $600,000. The unit selling price of the product is $4.
Instructions
a. Compute the break-even point in (1) sales units and (2) sales dollars.
b. Prepare a CVP graph, assuming maximum sales of $3,200,000.(Note: Use $$00,000 increments for sales and costs and 100,000 increments for units.)
c. Assuming actual sales are $2 million, compute the margin of safety (1) in dollars and (2) as a ratio.
Determine contribution margin ratio, break-even point in sales dollars, and margin of safety.
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