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AlekseyPX
2 years ago
5

The following information relates to the only product sold by Mastrolia Manufacturing. Sales price per unit $ 45 Variable cost p

er unit 27 Fixed costs per year 252,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
Business
1 answer:
Oduvanchick [21]2 years ago
8 0

Answer:

a. 40 % and $630,000

b. $ 270,000

Explanation:

The contribution margin ratio = Contribution ÷ Sales

The dollar sales volume required to break even = Fixed Cost ÷ contribution margin ratio

the margin of safety (in dollars) - company sells 20,000 units = Expected Sales - Break even Sales  

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