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Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year,...
Break-Even Units and Sales Revenue: Margin of Safety
Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,010,000 pages at a price of $0.1 each in the coming year. Product costs include:
| Direct materials | $0.015 |
| Direct labor | $0.005 |
| Variable overhead | $0.002 |
| Total fixed overhead | $183,400 |
There is no variable selling expense; fixed selling and administrative expenses total $35,000.
Required:
In your computations that involve the contribution margin ratio, do not round the ratio.
1. Calculate the break-even point in
units.
units
2. Calculate the break-even point in sales
revenue.
$
3. Calculate the margin of safety in units for
the coming year.
units
4. Calculate the margin of safety in sales
revenue for the coming year.
$
5. What if the total selling and administrative expenses are reduced to $11,600? Recalculate the following:
| a. Break-even point in units | units | |
| b. Break-even point in sales revenue | $ | |
| c. Margin of safety in units for the coming year | units | |
| d. Margin of safety in sales revenue for the coming year |
Solutions
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ekkarill92 answered 2 years agoRelated Solutions
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Direct labor
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