Homework Answers
| Forecasted sales = 150*100 | ||||||
| Forecasted sales revenue = 150*100 | ||||||
| Forecasted sales revenue = 15000 | ||||||
| Calculate the sales revenue at the break-even point | ||||||
| Let x be the break-even quantity. | ||||||
| fixed cost | 5000 | |||||
| Variable cost per unit | 40 | |||||
| 100*x = 5000 +40*x | ||||||
| 60*x = 5000 | ||||||
| x = 83.3333 | ||||||
| The break-even quantity is 83.3333. | ||||||
| The unit sales price is 100. | ||||||
| break-even sales revenue = 100*83.33 | ||||||
| break-even sales revenue = 8333.33. | ||||||
| Margin of safety = Forecasted sales revenue - sales revenue at break-even point | ||||||
| Margin of safety = 15000 - 8333.33. | ||||||
| Margin of safety = 6667.67. | ||||||
| $6667.67. | ||||||
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