Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100,...
Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety in terms of sales revenue is:
Round to two decimal places.
Your Answer:
Question 7 options:
| Answer |
Homework Answers
Contribution margin ratio
= ( Selling price per unit – Variable cost per unit) / Selling price per unit
= ( $100 - $40) / $100
= $60 / $100
= 0.60 or 60%
Break even sales
= Fixed costs / Contribution margin per unit
= $5,000 / 60%
= $5,000 / 0.60
= $ 8,333.33
Actual Sales
= Actual units sold x Selling price per unit
= 150 x $100
= $15,000
So, Margin of safety as sales revenue
= Actual sales – Break even sales
= $15,000 - $ 8,333.33
= $ 6,666.67
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Assume Sparkle Co. expects to sell 150 units next month. The
unit sales price is $100,...
Question 7 (1 point) Assume Sparkle Co. expects to sell 150 units next month. The unit...
Question 7 (1 point) Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety in terms of sales revenue is: Round to two decimal places. Your Answer: Answer
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year, which would generate total sales of $12,000,000. Management
predicts that pretax net income for next year will be $1,200,000
and that the contribution margin per unit will be $30.
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