Answered: Berea Company expects to sell 9,000…

Berea Company expects to sell 9,000 units. Total fixed costs are $84,000 and the contribution margin per unit is $16.00. Berea's tax rate is 40%. What is the margin of safety in units?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $18. What amount…

A: Number of units sold means the number of goods sold by the entity during a period. It is determined…

Q: Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and…

A: Since, target income is never less than fixed cost. We assume that company is earning their target…

Q: Motorola's Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling…

A: Break even point means a point where firm is neither earning profit nor incurring any loss.…

Q: Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company…

A: Margin of safety is the difference between the sales and the break even sales. It can be determined…

Q: Dave’s has total fixed costs of $45,000. If the company’s contribution margin is 50%, the income tax…

A: Units need to sell to produce to desired profit = (Fixed costs + Desired profit) / Contribution…

Q: Marengo Corporation's total costs at breakeven are $80,000 when it sells 20,000 units. These costs…

A: Fixed cost = total costs x 75% = $80000 x 75% = $60,000 Variable cost = total costs x 25% =…

Q: Bernard Tires sells tires to car dealerships for an average of $30 each. The variable cost of each…

A: Margin of Safety = Current sales - Break even Break even = Fixed Cost/ Sales - Variable cost

Q: Barometers sell for $300 each. Variable costs are $200 per unit, fixed production costs are $2,000,…

A: Profit is the excess of revenue over cost. Profit can be found out by deducting cost price from…

Q: Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs…

A: Margin of safety units = Actual sales - Break even sales Deduction of break even sales from actual…

Q: Sunland Corporation sells a product for $175 per unit. The product's current sales are 41,900 units…

A: Margin of safety in units = 41,900 - 34,155 = 7,745

Q: Jana's Company produces tie racks. The estimated fixed costs for the year are $288,000, and the…

A: Formula: Contribution margin ratio=Selling price per unit-Variable cost per unitSelling price per…

Q: Spice Inc.'s unit selling price is $51, the unit variable costs are $38, fixed costs are $102,000,…

A: Formula: Contribution margin = selling price - variable cost Deduction of variable cost from selling…

Q: Sagar

A: BREAKEVEN POINTBreak Even means the volume of production or sales where there is no profit or…

Q: Zhao Company has fixed costs of $342,200. Its single product sells for $173 per unit, and variable…

A: Margin of safety: Margin of safety is the point after which profit will happen in multiple…

Q: Marsh Motors sells 5,000 motors a year for $30 apiece. Variable costs are $8 per unit, and total…

A: The break even sales units are the sales where business earns no profit no loss during the year.

Q: (1) A company sells its products for $50 per unit. It has annual fixed cost of $300,000 and variable…

A: The contribution margin per unit is calculated by subtracting the variable cost per unit from the…

Q: Tequila Mockingbird, Inc. has total costs of $70,000 when it sells 10,000 units. If total fixed…

A: Cost: Cost in accounting can be explained as the amount that is borne by a company or an…

Q: Virgil Corp. has a selling price of $30 per unit, and variable costs of $20 per unit. When 12,000…

A: Cost volume profit analysis is the technique used by the management for decision-making. The methods…

Q: Braile Gear Works sells a single gear for a price of $73.00 per unit. The variable costs of the gear…

A: Break-even Point: It refers to that level or point of production at which the company's revenue…

Q: The following annual information is for Dexter Corporation: Product A Revenue per unit: $20.00…

A: Formula: Unit contribution margin = Selling price - Variable cost per unit

Q: Mia Enterprises sells a product for $90 per unit. The variable cost is $40 per unit, while fixed…

A: The break even data can be calculated as per CVP analysis

Q: Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $185,300, how…

A: Solution:Break- even point is the point of no profit, no loss i.e. where total expenditure equalizes…

Q: for $250 and total variable costs per jacket are $100. Frazier Company's fixed costs per unit are…

A: The contribution margin is calculated as difference between sales and variable costs. The operating…

Q: Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for…

A: Cost volume profit analysis is the technique used by management for decision making. The methods…

Q: A company has monthly fixed costs of $135,000. The variable costs are $5 per unit. If the sales…

A: Fixed cost is the cost that doesn't change with the change in the level of production. It's a period…

Q: Rothe Company manufactures and sells a single product that it sells for $90 per unit and has a…

A: Net operating income is the amount of money earned from the operations of an entity. It is an amount…

Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Berea Company expects to sell 9,000 units. Total fixed costs are $84,000 and the
contribution margin per unit is $16.00. Berea's tax rate is 40%. What is the margin of
safety in units?
allallatione

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:-

VIEW

Step 2: Explanations:-

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

rally synthesis inc. manufactures and sells 100 bottles per day. fixed costs are $22,000 and the variable costs for manufacturing 100 bottles are $30,000. Each bottle is sold for $1,200. how would the daily profit be affected if the daily volume of sales drop by 10%?
Zhao Company has fixed costs of $455,600. Its single product sells for $191 per unit, and variable costs are $124 per unit. If the company expects sales of 10,000 units, compute its margin of safety (a) in dollars and (b) as a percent of expected sales. $ a. Margin of safety (in dollar) 611,200 b. Margin of safety (%)
Fountain Corp. has a selling price of $14 per unit and variable costs of $9.80 per unit. When 18,000 units are sold, profits equaled $24,900. What is the margin of safety?
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 40% The company's fixed expenses are $459,000 per year. The company plans to sell 12,000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following e. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99,000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99,000 if the tax rate is 25%? Sales in units d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $5 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round Intermediate calculations.…
Big Chill, Inc. sells portable dehumidifier units at $193. Unit variable costs are $110. Fixed costs are $4,175,000. Management has set a profit objective of 15.1% return on sales. Calculate the sales volume in dollars that will provide a 15.1% return on sales. Round your answer to the nearest dollar .
Nata Products produces Gloves. The estimated fixed costs for the year are $164,500, and the estimated variable costs per unit are $12. The company expects to produce and sell 40,000 Gloves at a unit selling price of $26 per unit. How much is the break-even point in units?
A company spent $30,000 on development of a new product. The variable cost to get the product to customers is $3 per unit, and the price the company charges per unit is $20. What is the break-even quantity?
this is only one question
Davis Corporation manufactures a single product. The selling price is $340 per unit, and variable costs amount to $68 per unit. The fixed costs are $16,500 per month. What will be the monthly margin of safety (in dollars) if 200 units are sold each month? Select one: a. $82,375. b. $70,375. Oc. $47,375. Od. $12,375.