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%
__________________________________________END_____________________________________________________
Hi mate,
I would be grateful to you if you can provide a thumbs up and write one beautiful comment. It will improve my rating and let me continue my journey here.
In case of doubt, please comment. I will consider myself fortunate if I can help you.
All the best for your bright future.
Be safe from the corona. Wear a mask before going out and wash hands frequently especially before touching the face

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Majid Corporation sells a product for $145 per unit. The product's current sales are 41,300 units...
Majid Corporation sells a product for $145 per unit. The product's current sales are 41,300 units and its break-even sales are 32,625 units. What is the margin of safety in dollars? Multiple Choice $3,736,965 $5,988,500 $4,730,625 $1,257,875 Mcdale Inc. produces and sells two products. Data concerning those products for the most recent month appear below: Product I49V Product Z50U Sales $ 32,000 $ 37,000 Variable expenses $ 12,000 $ 27,330 The fixed expenses of the entire company were $39,140. The...
Each year, Worrix Corporation manufactures and sells 3,300 premium-quality multimedia projectors at $12,300 per unit. At...
Each year, Worrix Corporation manufactures and sells 3,300 premium-quality multimedia projectors at $12,300 per unit. At the current production level, the firm’s manufacturing costs include variable costs of $2,800 per unit and annual fixed costs of $6,300,000. Selling, administrative, and other expenses (not including 15% sales commissions) are $10,300,000 per year. The new model, introduced a year ago, has experienced a flickering problem. On average, the firm reworks 40% of the completed units and still has to repair under warranty...
4 Woodsman Company sells a product for $220 per unit. The variable cost is $120 per...
4 Woodsman Company sells a product for $220 per unit. The variable cost is $120 per unit, and fixed costs are $520,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $202,800. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $202,800 units
Question #7: The Trojan Company sells a product for $120 per unit. The variable cost is...
Question #7: The Trojan Company sells a product for $120 per unit. The variable cost is $40 per unit, and fixed costs are $270,000. Determine the (a) break-even point in sales units, and (b) break-even points in sales units if the company desires a target profit of $36,000. Question #8: Active Kids manufactures Children’s bicycles. It has fixed costs of $5,360,000. Active Kid’s sales mix and contribution margin per unit are shown as follows:                                        Sales Mix              Contribution Margin Basic                                  ...
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....
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) 5,500 $ 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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT