Question: E22-6 Stuart Company estimates that variable costs will be 60% of sales, and fixed costs will total $800,000. The selling price of the product is

 E22-6 Stuart Company estimates that variable costs will be 60% of

E22-6 Stuart Company estimates that variable costs will be 60% of sales, and fixed costs will total $800,000. The selling price of the product is $4. Instructions Apago PDF Enhancer (a) Prepare a CVP graph, assuming maximum sales of $3,200,000. (Note: Use $400,000 incre- ments 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 $2.5 million. Prepare a CVP graph and compute break-even point and margin of safety. (SO 6, 8)

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