Problem

Calculating Contribution Margin, Contribution Margin Ratio, Margin of SafetyLast month, Wi...

Calculating Contribution Margin, Contribution Margin Ratio, Margin of Safety

Last month, Willsted Company sold 450 units for $25 each. During the month, fixed costs were $2,520 and variable costs were $7 per unit.

Required:

1.Determine the unit contribution margin and contribution margin ratio.


2.Calculate the break-even point in units and sales dollars.


3.Compute Willsted’s margin of safety in units and as a percentage of sales.

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