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.
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.
Prepare a CVP graph and compute break‐even point and margin of safety.
( Study Objective 6 Study Objective 7).
Response is attached.
E5-4 Ewing Company estimates that variable costs will be 50% of sales, and fixed costs will total $800,000. ...
The solution explains CVP graph in detail