Answer:
The Margin of safety is $100,000
Explanation:
Price = Sales / number of units = $1,700,000 / 8500 = $200
Contribution margin ratio is the ratio of contribution margin to the sales value. It measure the ratio that contributes in the recovery of fixed cost and making profit.
Contribution margin ratio = Contribution margin / Sale price = $60 / $200 = = 0.3 = 30%
Break-even is the level of sales at which business has no profit no loss situation.
Break-even point = Fixed cost / Contribution margin ratio = $480,000 / 30% = $1600,000
Margin of safety is the level of sales at which the business is safe from making loss. Margin of safety measures the profit after the break-even point.
Margin of Safety = Total sales - Break-even point = $1,700,000 - $1,600,000
= $100,000
Answer:
Explanation:
step 1
Inventory after purchase adjustment = Inventory as per periodic inventory system + Adjustment of purchase
=$245,770+$28,480
=$274,250
Explanation
Company S has account as per the periodic inventory system of $245,770. Company S made purchases of about $28,480 from Person P with the condition that the FOB shipping point is to be included in the record as per periodic system. The commodities are supplied by the vendor and goods are in transit.
step 2
Compute the amount of inventory which is to be reported by Company S on December 31 as given below:
Value of inventory = Amount after purchase adjustment + Sales adjustment
=$274,250+$24,980
=$299,230
Explanation
When Company S sold the supplies to Company A with a cost of $28,480 at a sales price of $39,990. The commodities are sold at state of FOB destination which literally can be referred to mean that until and unless Company S make available the goods at destination of Company A, sale is not assumed to be complete. The commodities are still in transit which reveals that the sale to Company A won’t be recorded as sale for the period. The cost of stock is to be integrated in the cost of inventory.
Answer: 1.68
Explanation:
From the question, we are informed that a proposed project has fixed costs of $47,000 per year and that the operating cash flow at 11,000 units is $69,000.
Ignoring the effect of taxes, the degree of operating leverage will be:
= 1 + ($47,000/$69,000)
= 1 + 0.68
= 1.68