Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $40 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $31. The monthly fixed cost for Casey’s Cases is $3,150.   Required: a. How many cases must Casey sell every month to break even? b. Casey believes that he can sell 435 cases a month. What is the margin of safety in terms of the number of cases?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6MC: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling...
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Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $40 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $31. The monthly fixed cost for Casey’s Cases is $3,150.

 

Required:

a. How many cases must Casey sell every month to break even?

b. Casey believes that he can sell 435 cases a month. What is the margin of safety in terms of the number of cases?

 

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