Question
In: Accounting
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
Expert Solution
Note
If you have any queries kindly post a comment, i will solve it earliest.
If you satisfied with my answer, kindly give a thumbs up, it will help to encourage me.
ekkarill92 answered 2 years agoRelated Solutions
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 2,990,000 pages at a price of
$0.06 each in the coming year. Product costs include:
Direct materials
$0.009
Direct labor
$0.003
Variable overhead
$0.001
Total fixed overhead
$83,960
There is no variable selling expense; fixed selling and
administrative expenses total $42,000.
Required:
In your computations that involve the contribution margin ratio,
do not round the ratio.
1. Calculate the...
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 2,930,000 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 $166,020
There is no variable selling expense; fixed selling and
administrative expenses total $36,000.
Required: In your computations that involve the contribution
margin ratio, do not round the ratio.
1. Calculate the...
Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,050,000 pages at...
Dupli-Pro Copy Shop provides photocopying service. Next year,
Dupli-Pro estimates it will copy 3,050,000 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
$165,480
There is no variable selling expense; fixed selling and
administrative expenses total $42,000.
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...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin
of Safety, Degree of Operating Leverage
Aldovar Company produces a variety of chemicals. One division
makes reagents for laboratories. The division's projected income
statement for the coming year is:
Sales (203,000 units @ $70)
$14,210,000
Total variable cost
8,120,000
Contribution margin
$6,090,000
Total fixed cost
4,945,500
Operating income
$1,144,500
Required:
1. Compute the contribution margin per unit,
and calculate the break-even point in units. Calculate the
contribution margin ratio and use it to...
Considering that the company has a unit break-even point of 600 units, what is the margin of safety in terms of both units and sales revenue?
APPLY THE CONCEPTS: Margin of SafetyMargin of safety can allow you to see how much padding there is for
your company between profit and loss. If this number is great, it
may indicate that your company is performing very well. If this
number is small, it may be worth looking into possible remediation.
Consider the following pricing and cost information:Price and Cost InformationAmountSelling Price per Unit$400Variable Cost per Unit$325Total Fixed Cost$45,000For the upcoming period, the company projects that it will...
Break-Even in Sales Revenue, Variable-Costing Ratio, Contribution Margin Ratio, Margin of Safety Hammond Company runs a...
Break-Even in Sales Revenue, Variable-Costing Ratio,
Contribution Margin Ratio, Margin of Safety
Hammond Company runs a driving range and golf shop. The budgeted
income statement for the coming year is as follows.
Sales
$1,240,000
Less: Variable expenses
706,800
Contribution margin
$533,200
Less: Fixed expenses
425,000
Income before taxes
$108,200
Less: Income taxes
43,280
Net income
$64,920
Required:
1. What is Hammond’s variable cost ratio? Enter
your answer as a decimal value rounded to two decimal places.
What is the contribution...
Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year...
Break-Even Units, Contribution Margin Ratio, Margin of
Safety
Khumbu Company's projected profit for the coming year is as
follows:
Total
Per Unit
Sales
$3,054,500
$41.00
Total variable cost
1,466,160
19.68
Contribution margin
$ 1,588,340
$ 21.32
Total fixed cost
1,378,190
Operating income
$ 210,150
Required:
1. Compute the break-even point in units. If
required, round your answer to nearest whole value.
units
2. How many units must be sold to earn a profit
of $240,000? If required, round your answer...
Margin of Safety a. If Canace Company, with a break-even point at $203,500 of sales, has...
Margin of Safety
a. If Canace Company, with a break-even point
at $203,500 of sales, has actual sales of $370,000, what is the
margin of safety expressed (1) in dollars and (2) as a percentage
of sales? Round the percentage to the nearest whole number.
1. $
2. %
b. If the margin of safety for Canace Company
was 20%, fixed costs were $1,059,200, and variable costswere 80% of
sales, what was the amount of actual sales (dollars)?
(Hint: Determine...
Granite industries’ margin of safety as a percentage of its sales is 20%. Granite’s break-even sales...
Granite industries’ margin of safety as a percentage of its
sales is 20%. Granite’s break-even sales are $500000 and its
variable costs are 60% of sales. what is Granite’s operating
income
Explain the term sales mix and its effects on break-even sales. What is Margin of Safety...
Explain the term sales mix and its effects on break-even
sales.
What is Margin of Safety and how does it get used in CVP
Analysis?
How does a company determine sales mix when a company has
limited resources?
How does operating leverage affect profitability?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
ADVERTISEMENT