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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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In A competitive balance sheet,the ending cash was315000 in 2011 and270000 in 2012 the net increase or decrease is:
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3 years ago
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Answer:

It increases by 50 units.

Explanation:

Current break even point = \frac{Fixed\:Cost}{Contribution\:per\:unit}

Here, fixed cost = $4,500

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Current break even point = \frac{4,500}{10} = 450 units

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Final Answer

It increases by 50 units.

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All sales are made on account. Collections from customers are normally 70 percent in the month of​ sale, 20 percent in the month
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Answer:

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