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Veronika [31]
3 years ago
9

For Crane Company, sales is $1700000 (8500 units), fixed expenses are $480000, and the contribution margin per unit is $60. What

is the margin of safety in dollars
Business
1 answer:
const2013 [10]3 years ago
6 0

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

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4 0
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Von hayek's kayaks can borrow $12,500 for 60 days at a cost of $220 interest. what is the effective rate of interest?
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3 years ago
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3 0
3 years ago
On January 2013, Pennington Bancorp acquired $100,000 of marketable securities and classified them as Available for Sale. On Mar
saveliy_v [14]

Answer:

b. Net Income

e. Cash from Investing Activities

Explanation:

Calculation to determine Which of the following items would be increased by the sale of the marketable securities

Using this formula

Gain from investment = Selling price of the security - Value of the security

Let plug in the formula

Gain from investment= $93,000 - $85,000

Gain from investment= $8,000

Based on the above calculation The sell of marketable security will INCREASE CASH which means that CASH FROM INVESTING ACTIVITIES will increase and NET INCOME will increase.

Therefore the items that would be increased by the sale of the marketable securities are :

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4 0
3 years ago
Treasury stock that had been purchased for $4,330 last month was reissued this month for $5,190. The journal entry to record the
Anon25 [30]

Answer:

Credit to Paid-In Capital from Treasury Stock for $860

Explanation:

Based on the information given we were told that Treasury stock was purchased for the amount of $4,330 last month in which it was reissued this month for the amount of $5,190 which means that The journal entry to record the reissuance would include a credit to:

Paid-In Capital from Treasury Stock for $860

Calculated as:

Reissued treasury stock $5,190

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Paid-In Capital from Treasury Stock 860

6 0
3 years ago
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