# CVP graph

E5-4 Ewing Company estimates that variable costs will be 50% of sales, and fixed costs will total $800,000. The selling price of the product is $4.

Instructions

a. Prepare a CVP graph, assuming maximum sales of $3,200,000. (Note: Use

$400,000 increments for sales and costs and 100,000 increments for units.)

b. Compute the break-even point in (1) units and (2) dollars.

c. Compute the margin of safety in (1) dollars and (2) as a ratio, assuming actual

sales are $2 million.

Hint:

Prepare a CVP graph and compute break‐even point and margin of safety.

( Study Objective 6 Study Objective 7).

https://brainmass.com/business/accounting/accounting-decision-making-cvp-graph-41949

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E5-4 Ewing Company estimates that variable costs will be 50% of sales, and fixed costs will total $800,000. ...

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