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borishaifa [10]
3 years ago
12

Margin of Safety Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $4

5 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,650. Required: 1. Calculate the margin of safety in terms of the number of units. units 2. Calculate the margin of safety in terms of sales revenue. $
Business
1 answer:
valina [46]3 years ago
3 0

Answer:

Margin of safety - Units =3350

Margin of safety - Sales Revenue = $251250

Explanation:

Margin of Safety indicates how much sales may decrease before a loss can be made.

<u>Margin of safety - Units</u>

Margin of safety - Units = 5000-1650 =3350

<em>Margin of Safety as a % = 3350/5000 ×100 = 67%</em>

<u>Margin of safety - Sales Revenue</u>

Expected Sales = (5000 × $75) =$375000

Margin of Safety = $375000 × 67% = $251250

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Answer:

C. Less than the variance of each asset, except when the two assets are perfectly positively correlated.

Explanation:

In diversification, there is the less risk in the portfolio that can be determined by the standard deviation. Also the risk can decrease at the time when the asset is lower than the perfect correlation and the same should be place in portfolio. Now if the asset along perfect positive correlation place in the portfolio so the the portfolio risk could be large than the risk of the individuals assets

6 0
2 years ago
Leaf Lovers Garden Centers is a chain of discount gardening stores throughout the United States. Top management realizes that am
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Decentralised

Explanation:

Leaf lover's garden is an organisation which has given their regional managers the authority to make decisions on the behalf of the company. Any organisation which provides their mid-level and low-level managers the authority to make decisions is known as decentralised organisations. This type of organisational structure is different from the centralised organisation, where most of the decisions are made by top managers and CEOs.

7 0
3 years ago
As the owner of a party store, you have decided to lower the price for all balloons this month. What do you expect to happen?
Ulleksa [173]

Answer:

Quantity demanded for balloons will increase.

Explanation:

According to the law of demand, there is an inverse relationship between the price of the commodity and the quantity demanded for that commodity.

This means that if there is an increase in the price of a good then as a result the quantity demanded for that good decreases and on the other hand if there is a fall in the price of a good then as a result the quantity demanded for that good increases.

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Fall in the price of balloons will lead to increase the quantity demanded for balloons.

3 0
3 years ago
MC Qu. 128 Leeks Company's product has... Leeks Company's product has a contribution margin per unit of $13.57 and a contributio
Ray Of Light [21]

Answer:

The price of the product is $59

Explanation:

Contribution margin is the net of the selling price and variable cost per unit. Contribution margin ratio is the ratio of contribution per unit to selling price per unit. As given below

Contribution margin ratio = Contribution margin per unit / Selling price per unit

23% = $13.57 / Selling price per unit

Selling price per unit = $13.57 / 23% = $59

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3 years ago
True Tomato Inc. makes organic ketchup. To promote its products, this firm decided to make bottlesin the shape of tomatoes. To a
Fittoniya [83]

Answer:

3) physical-asset specificity

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In a business to business relationship, physical asset specificity refers to an asset, or product or service designed to fit a particular or specialized customer's need.

In this case, True Tomato needs a very specific type of bottle that probably no other ketchup manufacturer may use or want to use. So their bottle supplier specifically manufactures the tomato shaped bottle to meet True Tomato's specific requirements.

5 0
2 years ago
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