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Last month, Laredo Company sold 530 units for $65 each. During the month, fixed costs were $4,342 and variable costs were $39

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Answer #1

1. Unit contribution margin = 65-39 = $26

Contribution margin ratio = 26/65 = 40%

2. Break even point = 4342/26 = 167 units

Break even sales = 4342/0.40 = $10855

3. Margin of safety = 530-167 = 363 units

Margin of safety = (363*65) / (530*65) = 68.49%

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