Answers
· Requirements
Requirement 1 |
Requirement 2 |
Requirement 3 |
||
[a] |
Units sold |
6300 |
2700 |
9000 |
[b] |
Sales dollars |
$315,000 |
$324,000 |
$639,000 |
[c] |
A Percentage |
20% |
20% |
20% |
· Workings
Game players |
Tablets |
Total |
||
A |
Selling price |
$50 |
$120 |
|
B |
Variable cost |
$30 |
$80 |
|
C = A -B |
Contribution margin |
$20 |
$40 |
|
D |
Sales Mix |
70% |
30% |
|
E = C x D |
Weighted average CM per unit |
$14.00 |
$12.00 |
$26.00 |
A |
Total Fixed Cost |
$936,000 |
B |
Total Weighted average CM per unit |
$26 |
C = A/B |
Total Break even units |
36000 |
D = C x Sales Mix % |
Game Player Break even unit |
25200 |
E = C x Sales Mix % |
Tablets Break even units |
10800 |
Game Player |
Tablets |
Total |
||
A |
Actual sales units |
31500 |
13500 |
45000 |
B |
Break even sales units |
25200 |
10800 |
36000 |
C = A - B |
Margin of Safety in 'units sold' |
6300 |
2700 |
9000 |
D |
Sale price per unit |
$50 |
$120 |
|
E = C x D |
Total margin of safety sales |
$315,000 |
$324,000 |
$639,000 |
F = (C/A) x 100 |
A Percentage |
20% |
20% |
20% |
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