Question
In: Accounting
Mcmurtry Corporation sells a product for $120 per unit. The product's current sales are 12,300 units...
Mcmurtry Corporation sells a product for $120 per unit. The product's current sales are 12,300 units and its break-even sales are 10,824 units. The margin of safety as a percentage of sales is closest to:
Multiple Choice
-
12%
-
14%
-
88%
-
86%
Solutions
Expert Solution
Hence, the answer is 12%
| Margin of safety= | (Current sales level-Breakeven point)/Current sales level*100 | ||
| Sales In units | 12300 | units | |
| Sales in dollar | 1476000 | 12300*120 | |
| Break-even Sales In units | 10824 | units | |
| Sales in dollar | 1298880 | 10824*120 | |
| Margin of safety= | ((1476000-1298880)/1476000)*100 | ||
| 12 | |||
| = | 12% |
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ekkarill92 answered 1 year agoRelated Solutions
Majid Corporation sells a product for $145 per unit. The product's current sales are 41,300 units...
Majid Corporation sells
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Multiple Choice
$3,736,965
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$1,257,875
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Product Z50U
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Question #8:
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Aztec Company sells its product for $150 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $150 per unit. Its actual
and budgeted sales follow.
Units
Dollars
April (actual)
3,000
$
450,000
May (actual)
1,800
270,000
June (budgeted)
6,000
900,000
July (budgeted)
5,000
899,000
August (budgeted)
3,700
555,000
All sales are on credit. Recent experience shows that 26% of credit
sales is collected in the month of the sale, 44% in the month after
the sale, 25% in the second month after the sale, and 5% proves to
be uncollectible....
Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $160 per unit. Its actual
and budgeted sales follow. Units Dollars April (actual) 5,000 $
800,000 May (actual) 2,000 320,000 June (budgeted) 4,500 720,000
July (budgeted) 3,500 719,000 August (budgeted) 3,900 624,000 All
sales are on credit. Recent experience shows that 26% of credit
sales is collected in the month of the sale, 44% in the month after
the sale, 26% in the second month after the sale, and 4% proves to
be uncollectible....
Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $160 per unit. Its actual
and budgeted sales follow.
Units
Dollars
April (actual)
3,500
$
560,000
May (actual)
2,000
320,000
June (budgeted)
5,000
800,000
July (budgeted)
4,000
799,000
August (budgeted)
4,100
656,000
All sales are on credit. Recent experience shows that 24% of credit
sales is collected in the month of the sale, 46% in the month after
the sale, 25% in the second month after the sale, and 5% proves to
be uncollectible....
Aztec Company sells its product for $150 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $150 per unit. Its actual
and budgeted sales follow.
Units
Dollars
April (actual)
4,000
$
600,000
May (actual)
2,200
330,000
June (budgeted)
5,000
750,000
July (budgeted)
4,000
749,000
August (budgeted)
3,900
585,000
All sales are on credit. Recent experience shows that 24% of credit
sales is collected in the month of the sale, 46% in the month after
the sale, 27% in the second month after the sale, and 3% proves to
be uncollectible....
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Aztec Company sells its product for $170 per unit. Its actual
and budgeted sales follow. Units Dollars April (actual) 5,500 $
935,000 May (actual) 4,000 680,000 June (budgeted) 5,500 935,000
July (budgeted) 7,000 1,190,000 August (budgeted) 3,600 612,000 All
sales are on credit. Recent experience shows that 24% of credit
sales is collected in the month of the sale, 46% in the month after
the sale, 25% in the second month after the sale, and 5% proves to
be uncollectible....
Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. units...
Aztec Company sells its product for $160 per unit. Its actual
and budgeted sales follow.
units
April (actual)
7,500
$
1,200,000
May (actual)
3,000
480,000
June (budgeted)
6,500
1,040,000
July (budgeted)
6,000
960,000
August (budgeted)
4,200
672,000
All sales are on credit. Recent experience shows that 24% of
credit sales is collected in the month of the sale, 46% in the
month after the sale, 25% in the second month after the sale, and
5% proves to be uncollectible. The...
Aztec Company sells its product for $150 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $150 per unit. Its actual
and budgeted sales follow.
Units
Dollars
April (actual)
4,500
$
675,000
May (actual)
2,000
300,000
June (budgeted)
5,500
825,000
July (budgeted)
4,500
824,000
August (budgeted)
3,800
570,000
All sales are on credit. Recent experience shows that 28% of credit
sales is collected in the month of the sale, 42% in the month after
the sale, 27% in the second month after the sale, and 3% proves to
be uncollectible....
Aztec Company sells its product for $170 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $170 per unit. Its actual
and budgeted sales follow.
Units
Dollars
April (actual)
5,000
$
850,000
May (actual)
2,000
340,000
June (budgeted)
5,500
935,000
July (budgeted)
4,500
934,000
August (budgeted)
4,000
680,000
All sales are on credit. Recent experience shows that 26% of credit
sales is collected in the month of the sale, 44% in the month after
the sale, 27% in the second month after the sale, and 3% proves to
be uncollectible....
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