Question

In: Accounting

Units sold 1,180 Price $ 10 Sales $ 11,800 Variable manufacturing costs 4,720 Fixed manufacturing costs...

Units sold 1,180
Price $ 10
Sales $ 11,800
Variable manufacturing costs 4,720
Fixed manufacturing costs 2,360
Variable selling costs 1,180
Fixed administrative costs 1,180

Required:

Using the data provided, compute the margin of safety and margin of safety ratio.

mos:

mos ratio:

Solutions

Expert Solution

Margin of Saftey = Total Sales - Break Even Sales
=$ 11,800 -$ 7080
Margin of Saftey = $4,720
Working Notes
Sales                    11,800
less : Variable costs
Manufacturing costs                       4,720
Selling Costs                       1,180                      5,900
Contribution Margin                      5,900
Contribution Margin Ratio Contribution Margin / Sales *100
= $ 5900 / $ 11800 *100
=50%
Fixed Costs :
Fixed Manufacturing costs $ 2360
Fixed Admnistrative costs $ 1180
Total Fixed Costs $ 3540
Break even sales Fixed Cost / Contribution margn ratio
=$ 3540 / 50%
=$7080
margin of safety ratio =Total Sales - Break Even Sales/Total Sale
=$4,720/$11,800*100
40%

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price...
Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price Machine Hours per Unit Total Sales Dollars Variable Cost per Unit Total Contribution Dollars Contribution Dollars per Unit Contribution Margin Percentage Item #1 $65,000 10000 $25,000 $2,000 22500 $10 Item #2 $55,000 20000 $22,000 $2,500 23000 $8 Item #3 $42,000 7500 $15,000 $1,750 27500 $7 Item #4 $27,000 5000 $5,000 $500 11000 $6 Complete the grey cells in the above table Which product would...
Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price...
Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price Machine Hours per Unit Total Sales Dollars Variable Cost per Unit Total Contribution Dollars Contribution Dollars per Unit Contribution Margin Percentage Item #1 $65,000 10000 $25,000 $2,000 22500 $10 Item #2 $55,000 20000 $22,000 $2,500 23000 $8 Item #3 $42,000 7500 $15,000 $1,750 27500 $7 Item #4 $27,000 5000 $5,000 $500 11000 $6 Complete the grey cells in the above table Which product would...
A company’s budgeted costs for 60,000 units are as follows: Fixed manufacturing costs $30,000 Variable manufacturing...
A company’s budgeted costs for 60,000 units are as follows: Fixed manufacturing costs $30,000 Variable manufacturing costs $15.00 per unit The company produced 50,000 units. How much is the flexible budget total manufacturing cost?
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $37 per unit, and variable manufacturing costs are...
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $37 per unit, and variable manufacturing costs are $111 per unit. Production was 91,000 units, while sales were 86,450 units. a. Determine whether variable costing income from operations is less than or greater than absorption costing income from operations. b. Determine the difference in variable costing and absorption costing income from operations. $
Variable manufacturing costs are $103 per unit, and fixed manufacturing costs are $162,000. Sales are estimated...
Variable manufacturing costs are $103 per unit, and fixed manufacturing costs are $162,000. Sales are estimated to be 7,500 units. If an amount is zero, enter "0". Do not round interim calculations. Round final answer to nearest whole dollar. a. How much would absorption costing income from operations differ between a plan to produce 7,500 units and a plan to produce 9,000 units? $ b. How much would variable costing income from operations differ between the two production plans? $
Variable manufacturing costs are $108 per unit, and fixed manufacturing costs are $53,200. Sales are estimated...
Variable manufacturing costs are $108 per unit, and fixed manufacturing costs are $53,200. Sales are estimated to be 5,300 units. If an amount is zero, enter "0". Do not round interim calculations. Round final answer to nearest whole dollar. a. How much would absorption costing income from operations differ between a plan to produce 5,300 units and a plan to produce 7,600 units?
If variable manufacturing costs are $10 per unit and total fixed manufacturing costs are $325,000, what...
If variable manufacturing costs are $10 per unit and total fixed manufacturing costs are $325,000, what is the manufacturing cost per unit if a. 5,000 units are manufactured and the company uses the variable costing concept? $ b. 6,500 units are manufactured and the company uses the variable costing concept? $ c. 5,000 units are manufactured and the company uses the absorption costing concept? $ d. 6,500 units are manufactured and the company used the absorption costing concept? $
At a sales level of 10,000 units, Darly Corporation has variable costs of $40,000, fixed costs...
At a sales level of 10,000 units, Darly Corporation has variable costs of $40,000, fixed costs of $48,000, and sales of $80,000. Calculate the sales level that would put the company at its break-even point. A - What is the selling price per unit? $ B - What is the variable cost per unit? $ C - What is the unit contribution margin? $ D - What is the break-even point in units? E - What is the break-even point...
Tech Com's. predicted 2017 variable and fixed costs are as follows: Variable costs Fixed costs Manufacturing...
Tech Com's. predicted 2017 variable and fixed costs are as follows: Variable costs Fixed costs Manufacturing 480,000 315900 Selling and Administrative 216,000 60500 Total 696,000 376,400 Tech com. produces a wide variety of computer interface devices. Per unit manufacturing cost information about one of these products, a high-capacity flash drive is as follows: Direct material $10 Direct labor 9 Variable Manufacturing Overhead 7 Fixed Manufacturing Overhead 9 Total manufacturing costs $35 The following is the variable selling and administrative costs...
No of units   Fixed costs   Total variable costs   Total Costs   Total Sales 0   15,000   0   15,000  ...
No of units   Fixed costs   Total variable costs   Total Costs   Total Sales 0   15,000   0   15,000   0 50   15,000   10,500   25,500   15,000 100   15,000   21,000   36,000   30,000 150   15,000   31,500   46,500   45,000 200   15,000   42,000   57,000   60,000 250   15,000   52,500   67,500   75,000 300   15,000   63,000   78,000   90,000 Create a CVP graph.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT