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?

Question

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?

Quizplus · Accepted Answer

The Answer of 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?

The Following Information Describes a Product Expected to Be Produced