Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of sales. Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners-Warm and Cozy. Current revenue, cost, and unit sales data for the two products appear below:WarmCozy$15.00Selling price per pairVariable expenses per pairNumber of pairs sold monthly$10.00$ 2.50$ 7.502,100 units700 unitsFixed expenses are $2,520 per month. Break-even sales dollarsMargin of safety in dollarsMargin of safety in percentage%

Break-even point refers to a point at which the company earns neither profit nor deficit. If the…

Answered: Compute the break-even point in sales…

Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of sales.

Cornerstones of Cost Management (Cornerstones Series)

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Chapter8: Budgeting For Planning And Control

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Question

Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of sales.

Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners-
Warm and Cozy. Current revenue, cost, and unit sales data for the two products appear below:
Warm
Cozy
$15.00
Selling price per pair
Variable expenses per pair
Number of pairs sold monthly
$10.00
$ 2.50
$ 7.50
2,100 units
700 units
Fixed expenses are $2,520 per month.

Break-even sales dollars
Margin of safety in dollars
Margin of safety in percentage
%

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