Question

Multiple Choice Question 140 The following monthly data are available for Crane Company, which produces only one product: Selling price per unit, $38; Unit variable expenses, $14; Total fixed expenses, $42000; Actual sales for the month of June, 2000 units. How much is the margin of safety for the company for June? $84000 $9500 $1750 $42000

Answer 1

Solution & Requirement : How much is the margin of safety for the company for June ? Stepl. Calculation of Break Even Sales Break Even Fixed expenses Sales X Selling Price per Selling Price to Variable pea unit Expenses permit unit 4 2x X $38 $66,500 $42000 |$381-3814 = 1750 × $38 Break Euen Sales = Main Step & Calculation of Margin of Safety Margin of Safety = Total Sales Value - Break Even Sales (2000 mits X $38) - $66,500 =$76,000 - $66,500 Margin of Safety = $9.500 Auswer o Option 28/89,500) Margin of Safety z