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katrin2010 [14]
2 years ago
7

BRAINLIEST !!what are your thoughts on Sam and Bud Walton?

Business
1 answer:
Ronch [10]2 years ago
3 0
That will simpler in
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Sue sells authentic Amish quilts on her website. Suppose Sue expects to sell 3 comma 000 quilts during the coming year. Her aver
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Answer:

(A) 1,200 Margin of Safety_{units}

(B) 330,000 Margin of Safety_{usd}

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Explanation:

(A)

Sales \: Revenue - Variable \: Cost = Contribution \: Margin

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\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}

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3,000 - 1,800 = 1,200 Margin of Safety_{units}

HOW? we Calculate the contribution per unit. Then the BEP in units and with that the margin of safety in units.

(B)

\frac{Contribution Margin}{Sales Revenue} = $Contribution Margin Ratio

125/275 = 0.45454545 = <u>5/11 CM ratio</u>

\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}

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825,000-495,000 = 330,000 Margin of Safety_{usd}

HOW? we Calculate the contribution ratio by dividing CM over sales. Then the BEP in dollars and with that the margin of safety in dollars.

<em><u>Important:</u></em> When posible to avoid rounding errors express as fraction iof posible

(C)

\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety

\frac{330,000}{825,000} \times 100 = margin \: of \: safety

Margin of Safety 40%

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