Homework Answers
ANSWER 1
MARGIN OF SAFETY(DOLLOR) OF MAJID CORPORTION=$1212975
WORKINGS
MOS($)=CURRENT SALES-BEP($)
=(135*41100)-(135*32115)=5548500-4335525
=1212975
ANSWER 2
CONTRIBUTION MARGIN RATIO OF TILING GROUT=32.17%
WORKINGS
CM RATIO=SALES REVENUE-VARIABLE COST/SALE REVENUE*100%
=1940000-(959000+357000)/1940000*100%
=1940000-1316000/1940000*100%
=624000/1940000*100%
=32.17
ANSWER 3
SALES AT LAST YEAR OF SABV CORPORATION=$722000
WORKING
FIRST WE FOUND OUT CM RATIO
IF V.C RATIO IS 75% THEN CM RATIO 25%
THEN WE WILL FIND FIXED COST
BEP($)=FIXED COST/CM RATIO
870000=FIXED COST/25%
FIXED COST=870000*25%=217500
NOW LET TAKE SALE OF LAST YEAR X,THEN V.C BE 0.75X AND CONTRIBUTION 0.25X
WE KNOW
PROFIT/LOSS=CONTRIBUTION-FIXED COST
-37000=0.25X-217500
0.25X=217500-37000
X=180500/0.25=722000
THEREFORE, X=LAST YEAR SALE=722000
ANSWER 4
MARGIN OF SAFETY(UNITS) OF PREMIUM WIRE STRIPPERS=45454.54 UNITS
WORKINGS
FIRST WE HAVE TO FIND OUT CONTRIBUTION PER UNIT
=4176000-2871000-348000/580000=1.65 PER UNIT
THEN WE HAVE TO FIND BEP(UNIT)
BEP(UNIT)=FIXED COST/CONTRIBUTION PER UNIT
=(778000+104000)/1.65
=534545.46 UNIT
THEN
MOS(UNITS)=ACTUAL UNIT SOLD-BEP(UNITS)
=580000-534545.46=45454.54 UNITS
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