Homework Answers
Answer 1
59.82 %
Calculations:
| Income statement | |
| Sales | $ 722,700 |
| Less: variable Cost | $ 372,300 |
| Contribution | $ 350,400 |
| Less: Fixed Cost | $ 140,800 |
| Net Income | $ 209,600 |
| Break even sales (140800/0.48) | $ 290,400 |
| Margin of safety (722700 -290400) | $ 432,300 |
| Margin of safety in % (432300 / 722700) | 59.82% |
Answer 2
| Division | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Cummings | $ 190,000 | $ 197,600 | $ 205,504 | $ 213,724 |
| Springfeild | $ 330,000 | $ 336,600 | $ 343,332 | $ 350,199 |
| Douglas | $ 300,000 | $ 318,000 | $ 337,080 | $ 357,305 |
Calculations:
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Required
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company pays $11 per unit for the variable costs of the product and
incurs annual fixed costs of $161,500. Gibson expects to sell
22,600 units of product.
Required
Determine Gibson’s margin of safety expressed as a percentage.
(Round your answer to 2 decimal places (i.e., .2345 should
be entered as 23.45).)
Margin of safety
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