Question

Staley Co. manufactures computer monitors. The following is a summary of its basic cost and revenue data Sales price Variable

Multiple Choice

  • 49.80%.

  • 34.10%.

  • 36.90%.

  • 35.90%.

  • 90.90%.

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Answer #1

Ans:

Break even point units =( Fixed cost / Contribution margin per unit)

= ($79,600 / $218)

= 365 units

Break even point in units = 365

Margin of safety sales in units = Actual sales units - Break even sales units

Margin of safety sales in units = 580 - 365

= 215

Margin of safety ratio = ( margin of safety units / Actual sales units) *100

= (215 / 580 ) *100

= 36.90

Margin of safety ratio= 36.90

Option C

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