Margin of Safety =Sales Revenue - Break-even Sales | ||
Break-even Sales =Sales Revenue - Margin of Safety | ||
Break-even Sales =$500,000 - $200,000 =$300,000 | ||
When Sales is $300,000 then Contribution Margin will be equal to Fixed Costs which is $50,000 | ||
Then when Sales is $300,000 then Variable Cost will be $250,000($300,000-$50,000) | ||
So Option D is answer | ||
Progress You are on question 15 of 21 If the margin of safety is $200,000, fixed...
Carney's current income statement shows the following: $500,000 Sales revenue Cost of goods sold Variable costs Fixed costs Gross profit · Selling and administrative expenses Variable costs Fixed costs Net income $150,000 150,000 300,000 200,000 100,000 50,000 150,000 $50,000 What is Carney's margin of safety? $50,000 $125,000 $100,000 $166,667
Discontinue a Segment Esther Corporation has the following three divisions, Alpha, Bravo and Charlie. Determine whether or not Charlie Division should be discontinued. All fixed costs are unavoidable. Alpha Bravo Charlie Total Sales 500,000 450,000 600,000 1,550,000 Cost of Goods Sold Variable 200,000 150,000 300,000 650,000 Fixed 50,000 50,000 100,000 200,000 Total CGS 250,000 200,000 400,000 850,000 Gross Margin 250,000 250,000 200,000 700,000 Operating Expenses Variable 175,000 200,000 200,000 575,000 Fixed 25,000 25,000 25,000 75,000 Total Operating Expenses 200,000 225,000 225,000...
21. Variable costs are $400,000 and the contribution margin (CM) ratio is 0.20 (20%). If target profit (net income) is $50,000, how much are fixed costs? a $75,000 b. $50,000 c. $350,000 d. $2,000,000 22. Contribution margin is the amount of sales revenue remaining after deducting a. mixed costs. b. fixed costs c. variable costs. d. factory overhead costs. 23. At Harry's Company, maintenance costs are a mixed cost. At the low level of activity (200 direct labor hours), maintenance...
21. Variable costs are $400,000 and the contribution margin (CM) ratio is 0.20 (20%). If target profit (net income) is $50,000, how much are fixed costs? a $75,000 b. $50,000 c. $350,000 d. $2,000,000 22. Contribution margin is the amount of sales revenue remaining after deducting a. mixed costs. b. fixed costs c. variable costs. d. factory overhead costs. 23. At Harry's Company, maintenance costs are a mixed cost. At the low level of activity (200 direct labor hours), maintenance...
A company’s sales figure is £250,000 and its margin of safety ratio is 40%. Assuming that the fixed costs, the variable cost per unit and the selling price per unit do not change, the company’s margin of safety for sales of £325,000 will be (2 marks): a. £175,000 b. £70,000 c. £150,000 d. £100,000
Question 1 1 pts Carney's current income statement shows the following: $500,000 Sales revenue Cost of goods sold Variable costs Fixed costs Gross profit Selling and administrative expenses Variable costs Fixed costs $150,000 150,000 300,000 200,000 100,000 50,000 150,000 $50,000 Net income What is Carney's margin of safety? $125,000 $100,000 $50,000 $166,667 Question 2 1 pts Truman Company has developed a new gadget with the following cost information Variable manufacturing costs: $25 per unit Fixed manufacturing costs: $60,000 Variable selling...
Margin of safety Organic Health Care Products Inc. expects to maintain the same inventories at the end of 2048 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during 2078. A summary report of these estimates is as follows: Estimated Variable Cost...
Margin of safety Organic Health Care Products Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during 20Y8. A summary report of these estimates is as follows: Estimated Fixed Cost...
The following information is taken from Wampler Co.’s current-year contribution income statement: Sales $200,000 Contribution margin 120,000 Fixed costs 90,000 Income taxes 12,000 What was Wampler’s margin of safety? A- $50,000 B-$168,000 C-$150,000 D- $182,000
VE Chapter 21 - End of Chapter Project Complete this project as a separate word or pdf file Submit as a Canvas Assignment at the course website clearly Print Your Name and Assignment Name at the top of each page DONNE re Income statements for two different companies in the same industry are as follows: Sales Less: Variable costs Contribution Margin Less: Fixed costs Operating Income $ 500,000 400,000 100,000 50,000 $50,000 $ 500,000 200,000 300,000 250,000 s50,000 1. Calculate...