The Rose Williams Company has a C/M ratio of 36%. Breakeven sales are Rs. 160,000. The...

The Rose Williams Company has a C/M ratio of 36%. Breakeven sales are Rs. 160,000. The company earned a profit of Rs. 28,800 during the year.

Required:

(a) Fixed expense. (b) Variable expense for the year
(b) Sales for year (d) Margin of safety ratio.

Expert Solution

	Breakeven sales	160,000
Multiple by:	Contribution Margin Ratio	36%
	Fixed expense	57,600

	Fixed expense	57,600
Add:	Profit earned	28,800
	Total contribution	86,400
Divided by:	Contribution Margin ratio	36%
	Sales for the year	240,000

	Sales	240,000
Less:	Total contribution	86,400
	Variable expense	153,600

	Sales	240,000
Less:	Breakeven sales	160,000
	Margin of safety in dollars	80,000
Divided by:	Sales	240,000
	Margin of safety ratio	33.333333%

ekkarill92 answered 1 year ago

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