Answer:
Instructiond are listed below.
Explanation:
Giving the following information:
Sales for the month of February 3,800
Variable manufacturing cost per unit $9.00
Sales price per unit $46.00
Fixed manufacturing overhead cost (per month for controllers) $82,000
Variable selling and administrative expenses per unit $4.80
Fixed selling and administrative expenses (per month for controllers) $13,130
A) contribution margin ratio = (selling price - unitary variable cost)/selling price
ontribution margin ratio = (46 - 13.8)/46= 0.7
B) degree of operating level= contribution margin/ EBIT
EBIT= sales - variable costs - fixed costs= (46-13.8)*3,800 - 82,000 - 13,130= 27,230
degree of operating level= 32.2/27230= 0.0012= 0.12%
C) Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 95,130/0,7= $135,900
D) Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= (3,800 - 2,954)/3,800= 0.22= 22%
