Answer:
$39,160
Explanation:
Awtis corporation has a margin of safety percentage of 25%
= 25/100
= 0.25
The break even point is $213,600
The variable expenses is 45%
= 45/100
= 0.45
The first step is to calculate the contribution margin ratio
Contribution margin ratio= 1-variable expenses
= 1-0.45
= 0.55
The fixed expenses can be calculated as follows
Fixed expenses= break even sales × contribution margin ratio
= $213,600×0.55
= 117,480
The total actual sales can be calculated as follows
= Break even sales/(1-margin of safety)
= $213,600/(1-0.25)
= $213,600/0.75
= $284,800
Therefore, the actual profit can be calculated as follows
Actual profit= Contribution margin ratio×sales - fixed expenses
= 0.55×284,800-$117,480
= $156,640-$117,480
= $39,160
Hence the actual profit is $39,160
