Please help! And please explain how to get answers so I can learn how to do it on future problems. Thanks in advance! I'll be sure to give a thumbs up.
Answer:
1) |
Contribution per unit = Selling price per unit - Variable costs per unit |
= $29 - $17 = $12 per unit |
Break even point = Fixed costs / Contribution per unit |
= $10,200 / $12 = 850 units |
Break even sales = Quantity × Selling price per unit |
= 850 × $29 = $24,650 |
Margin of safety in value = Budgeted sales - Break even sales |
1,000 × $29 - $24,650 |
= $4,350 |
2) |
Margin of safety as percentage of sales |
(Margin of safety in value/Total sales) |
= $4,350 / $29,000 |
= 15% |
Please help! And please explain how to get answers so I can learn how to do...
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