Question

Question 5 Glacial Company estimates that variable costs will be 57.3% of sales, and fixed costs will total $677,000. The selling price of the product is $6.00. Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 5,275.) (1) Break-even sales units (2) Break-even sales LINK TO TEXT VIDEO: SIMILAR EXERCISE Assuming actual sales are $1,801,000, compute the margin of safety in (1) dollars and (2) as a ratio. (Round ratio to 0 decimal places, e.g. 20.) (1) Margin of safety (2) Margin of safety ratio Click if you would like to Show Work for this question: Open Show Work

Answer 1

	Sales	$6.0000
Less	Variable costs($6.00*57.3%)	$3.4380
	Contribution margin per unit	$2.5620
	Contribution margin ratio	42.70%
	Fixed Costs	$6,77,000
	Break-even sales(Fixed Costs/CM per unit)	2,64,247	units
	Break-even sales(Fixed Costs/CM ratio)	$15,85,480
	Actual Sales	$18,01,000
Less:	Break-even sales(Fixed Costs/CM ratio)	$15,85,480
	Margin of safety sales	$2,15,520
	MOS Ratio(Margin of safety sales/Actual Sales)	12%