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E22-5 Dave's Steel Parts produces parts for the automobile industry. The company has monthly fixed...

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Accounting

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E22-5 Dave's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $640,000 and a contribution margin of 80% of revenues. 1. Compute Dave's monthly breakeven sales in dollars. Use the contribution margin Required ratio approach 2. Use contribution margin income statements to compute Dave's monthly operating income or operating loss if revenues are $500,000 and if they are $1,000,000 1. Do the results in Requirement 2 make sense given the breakeven sales vou computed in Requirement 1? Explain

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