Question

Homework: Week 5: Homework Score: 0 of 5 pts < 1 of 5 (0 complete) E7-21A (similar to) Hang Ten produces sports socks. The company has fixed expenses of $95,000 and variable expenses of $0.95 per package. Each package sells for $1.90. Read the requirements Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.) - Contribution margin per unit * Requirements 1. Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point in units and in dollars. 3. Find the number of packages Hang Ten needs to sell to earn a $28,500 operating income. Print Done

Answer 1

Solution 1:

Selling price - variable expense = Contribution margin per unit

$1.90 - $0.95 = $0.95

Contribution margin per unit / Selling price = Contribution margin Ratio

$0.95 / $1.90 = 50%

Solution 2:

Break even point in units = Fixed expenses/ Contribution margin per unit = $95000 / $0.95 = 100,000 units

Break even point in dollars = 100,000* $1.90 = $190,000

Solution 3:

Number of packages to be sold = (Fixed expenses + target Income) / Contribution margin per unit

= ($95000 + $28500) / $0.95 = 130,000 units

Answer 2

what is margin of safty

Answer 3

what is margin of safty