Chapter 21 Currently, the unit selling price of a product is $100, the unit variable cost is $75 and the total fixed costs are $235,000. a. Compute the current break-even sales in units. b. Compute the anticipated break-even sales in units, assuming that the unit selling price is increase to $115 and all costs remain constant. c. If a company has a break-even point of $380,000 of sales, and has $455,000 in actual sales, what is the margin of safety express in dollars and as a percentage of sales? d. If the margin of safety for a company was 20%, fixed costs were $80,000 and variable costs were 75% of sales, what was the amount of ac sales in dollars? (Hint: Determine the break-even in sales dollars first.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Chapter 21
Currently, the unit selling price of a product is $100, the unit variable cost is $75
and the total fixed costs are $235,000.
a. Compute the current break-even sales units.
b. Compute the anticipated break-even sales in units, assuming that the unit selling
price is increase to $115 and all costs remain constant.
c. If a company has a break-even point of $380,000 of sales, and has $455,000 in actual sales,
what is the margin of safety express in dollars and as a percentage of sales?
d. If the margin of safety for a company was 20%, fixed costs were $80,000 and variable
costs were 75% of sales, what was the amount of actual sales in dollars?
(Hint: Determine the break-even in sales dollars first.)
Transcribed Image Text:Chapter 21 Currently, the unit selling price of a product is $100, the unit variable cost is $75 and the total fixed costs are $235,000. a. Compute the current break-even sales units. b. Compute the anticipated break-even sales in units, assuming that the unit selling price is increase to $115 and all costs remain constant. c. If a company has a break-even point of $380,000 of sales, and has $455,000 in actual sales, what is the margin of safety express in dollars and as a percentage of sales? d. If the margin of safety for a company was 20%, fixed costs were $80,000 and variable costs were 75% of sales, what was the amount of actual sales in dollars? (Hint: Determine the break-even in sales dollars first.)
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