Company XYZ is currently producing and selling 20,000 units. The selling price per unit is $6 while the variable costratio is 20%. Assuming total fixed costs of $30,000, what is the margin of safety in ($) value?O a. 122,500O b. 142,500O c. None of the given answersO d. 82,500O e. 102,500

The margin of safety: The margin of safety (MOS) is the excess of sales over the break-even sales.…

Answered: cuming total fixed costs of $30,000,…

Business

Accounting

cuming total fixed costs of $30,000, what is the margin of safety in ($) value?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

See similar textbooks

Related questions

Q: What is the Equivalent Annual Operating Cost?

A: Equivalent annual cost (EAC) is the yearly expense of owning, managing, and operating an asset over…

Q: 0 is the total fixed cost. What is the total units to be sold to arrive a profit of 146,000?

A: The units to be sold must cover the fixed cost and earn target profit Therefore Profit =…

Q: Requlred Information [The following Information applies to the questions displayed below.] Trey…

A: Weighted Average - Under the Weighted Average Method, the cost is considered to be average at the…

Q: True or false: The breakeven point in dollars can be computed by dividing the contribution margin…

A: Solution Concept Breakeven point is the point at which the contribution generated covers the fixed…

Q: 5. Asssume that the revenue for product A is $3,500. The variable costs are $425. What is the PV? O…

A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

Q: Fixed costs per unit _______. .1. can be estimated by the high-low method 2. remains the same when…

A: The high-low technique tries to distinguish between fixed and variable costs. The highest level of…

Q: On the CVP graph, the next unit sold will increase total cost by an amnount equal to the Select one:…

A: CVP analysis refers to the Cost Volume Profit Analysis. In the cost volume Profit analysis the main…

Q: Board Problem A=200, P=12 Rent per unit=20 Spoilage per unit=.18, Opportunity cost per unit=.18…

A: Economic order quantity (EOQ) is a calculation companies perform that represents their ideal order…

Q: In the equation y = $11.75x + $550, "x" represents Question 28 options: number of units…

A: Here in this question, we are required to determine "X" denotes to which of the following options.…

Q: How do you calcuate the Lower-of-Cost-or-Market ? Problem : If cost is $13 Replacement…

A: Answer and calculations are given below

Q: Oki Products, Ltd., has observed the following processing costs at various levels of activity over…

A: The question is based on the concept of Cost Accounting. Variable cost is the cost that remains same…

Q: If contribution margin is zero, while fixed expenses are $1000, what will be the net operation…

A: The contribution margin is used to show the amount of sales left to cover the fixed expenses and…

Q: How would the equation for total costs be written using the following? y = total costs v =…

A: Variable costs are costs that change with change in volume of production . Whereas, Fixed costs…

Q: with solution

A: Annual cost refers to the compiled sum value of expenses involved in producing or purchasing an item…

Q: Your boss would like you to estimate the fixed and variable components of a particular cost Actual…

A: The least-squares regression method is a technique used to estimate a linear total cost function,…

Q: Suppose the wage rate is $10 and the rental rate on capital is $20. Consider the total cost line…

A: Solution- Vertical axis intercept=Total CostCapital Price…

Q: In the equation Y = 200 + 0.8X, Y represents Question 54 options: a) Variable cost per unit of…

A: The total cost of production is calculated as sum of variable and fixed cost. The variable cost…

Q: The linear cost function is C(x) =

A: Linear equation form:C (x) = mx + bm = Marginal cost = $60x = No. of units = 120 itemsC(x) = Total…

Q: a. What is the current total product cost (for the 15 million units), including fixed and variable…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: B\ If the variable cost per la gorts fixed costs, and total costs if production is

A: solution given Variable cost 10 per unit Fixed cost of production 2000 Number…

Q: Why is variable cost $174?

A: Variable costs are the costs which are directly related to the production of a unit. If there is no…

Q: Total Material cost is 500000 OMR Fixed cost is 0. Calculate Total Variable cost

A: Total Cost = Total Variable Cost + Total Fixed Cost

Q: Given the mixed cost function y = $6.50x + $3,000. What does the $6.50 represent? a.Total cost per…

A: Intercept is the total fixed cost and slope of cost function is the variable cost per unit. And the…

Q: If sales are $500,000, variable cost are $200,000, and fixed costs are $240,000, what is the…

A: Contribution margin = Selling price - Variable cost Contribution margin ratio = (Contribution/Sales)…

Q: Suppose the cost and the demand for a daily product is: C=10 d(p) = D(1 - w(p)) = 200-10p What is…

A: We have the demand and the cost function. We need to find the total contribution (profit) based on…

Q: What is the Total equivalent annual cost?

A: Equivalent annual cost (EAC) is the annual cost of claiming, overseeing, and supporting an asset…

Q: In the equation y = $7.20x + $250,250, Question 37 options: $250,250 are the total variable…

A: The total cost is calculated as sum of total variable cost and total fixed cost.

Q: Miniconjou Co. provides the following data for the most recently completed calendar year. Answer the…

A: Solution.. Estimated machine hours = 5,280 Estimated fixed overhead costs = $33,000 Variable…

Q: If, Total Fixed cost OMR 40000, Selling price per unit OMR 20, and Variable cost per unit OMR 12.…

A: Given: Selling price per unit = OMR 20 Variable cost per unit = OMR 12 Therefore, Variable cost…

Q: Using the high-low method of cost estimation, estimate the behavior of the maintenance costs…

A: The high-low method is used to separate the fixed and variable costs from the mixed costs of…

Question

Company XYZ is currently producing and selling 20,000 units. The selling price per unit is $6 while the variable cost
ratio is 20%. Assuming total fixed costs of $30,000, what is the margin of safety in ($) value?
O a. 122,500
O b. 142,500
O c. None of the given answers
O d. 82,500
O e. 102,500

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

VIEW

Step 2

VIEW

Step by step

Solved in 2 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

Company XYZ is currently producing and selling 20,000 units. The selling price per unit is $8 while the variable cost ratio is 20%. Assuming total fixed costs of $30,000, what is the margin of safety in ($) value? O a. None of the given answers O b. 142,500 Oc 122,500 O d. 82,500 O e. 102,500
Company XYZ is currently producing and selling 20,000 units. The selling price per unit is $10 while the variable cost ratio is 20%. Assuming total fixed costs of $30,000, what is the margin of safety in ($) value? O a. 122,500 O b. 162,500O c. 82,500 O d. 102,500 O e. None of the given answers
Company XYZ has total fixed costs of $10,000. Assume a selling price per unit of $48 and total variable cost per unit of $24, what is the breakeven point in ($) value? Select one: O a. 240,000 O b. 480,000 O c. 417 O d. None of the given answers O e. 20,000
Company XYZ has total fixed costs of $9,000. Assume a selling price per unit of $40 and total variable cost per unit of $30, what is the breakeven point in ($) value? Select one: O a. None of the given answers O b. 900 Oc 360,000 O d. 36,000 O e. 90,000
Company XYZ has total fixed costs of $5,000. Assume a selling price per unit of $8 and total variable cost per unit of $4, what is the breakeven point in ($) value? Select one: O a. 40,000 O b. None of the given answers O c. 1,250 O d. 10,000 O e. 20,000
Company XYZ produces and sells wireless earphones . The selling price per unit is $5 and the total fixed costs are $20,000 . Assuming a variable cost ratio of 40\% , what is the breakeven point in ($) value ? (round figures to the nearest number ) a. 33,333 b.40,000 c. None of the given answers d. 66,667 e. 50,000
Company XYZ produces and sells wireless earphones. The selling price per unit is $5 and the total fixed costs are $20,000. Assuming a variable cost ratio of 40%, what is the breakeven point in ($) value? (round figures to the nearest number) O a. None of the given answers: O b. 66,667 O c. 33,333 O d. 40,000 O e. 50,00O
Company XYZ produces and sells wireless earphones. The selling price per unit is $5 and the total fixed costs are $20,000. Assuming a variable cost ratio of 70%, what is the breakeven point in ($) value? (round figures to the nearest number) Oa. None of the given answers: O b. 50,000 Oc. 40,000 O d. 66,667 O e. 33,333
Please help with multiple choice questions.
Y6
Vinubhai
Aragon Company produces and sells a particular home appliance. The variable cost (VC) per unit is P50. The unit selling price (SP) is P120 while fixed cost (FC) is P70,000. What is the cost function in this case? a. P = 120x – 50x – 70,000b. C = 50x + 70,000c. R = 120x d. no answer