Problem - Presto Company makes radios that sell for $27 each. For the coming year, management expects fixed costs to total $278,500 and variable costs to be $8.10 per unit.
Compute the break-even point in dollars using the contribution margin (CM) ratio.
Compute the margin of safety ratio assuming actual sales are $809,000.
Compute the sales dollars required to earn net income of $314,960.