<ebookShow Me HowMargin of SafetyThe Rachel Company has sales of $820,000, and the break-even point in sales dollars is $598,600.Determine the Rachel company's margin of safety as a percent of current sales.%Check My Work 2 more Check My Work uses remainingPrevious

The margin of safety percent is a financial ratio that measures the amount of sales that exceed the…

Answered: Determine the Rachel company's margin…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and percentage - in cost of goods sold. The cost of goods sold increased at a * rate than the increase in sales, thus causing the percentage increase in gross profit to be * than the percentage increase in sales.
2. Conceptual Connection: Compute net profit margin for ERS. Round your answer to one decimal place. 6.6 % A If ERS is able to increase its service revenue by $100,000, what should be the effect on future income? If ERS had an incremental increase in revenue of $100,000, based on the net profit margin computed, what is the additional potential profit? 3. Conceptual Connection: Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS' future profitability? A declining profit margin implies that ERS is having difficulty maintaining control over its expenses.
12 Net profit margin is equal to the gross profit margin times the operating profit margin. Select one: True False
Suppose sales volume increase by the same percentage for Company X and Company Y. Use CVP analysis to explain which company will experience a larger percentage increase in profits? Company X - Dominated by fixed expenses; or Company Y - Dominated by variable expenses.
Suppose that the profit (in dollars) from the sale of Kisses and Kreams is given by P(x, y) = 10x + 6.9y-0.001x²-0.045y² where x is the number of pounds of Kisses and y is the number of pounds of Kreams. Find P/ay, and give the approximate rate of change of profit with respect to the number of pounds of Kreams that are sold if 100 pounds of Kisses and 14 pounds of Kreams are currently being sold. (Give an exact answer. Do not round.) What does this mean? If the number of pounds of Kisses is held constant and the number of pounds of Kreams is increased from 14 to 15, the profit will increase by approximately $ Need Help? Read It Watch it
The correlation (r) between the price of a product (x) and average daily sales (y) is –0.95. Complete the following statements: a) The coefficient of determination is b) The coefficient of non-determination is
How many statements below regarding margin of safety are correct? 1. It is the amount by which sales can be reduced without incurring a loss. 2. It is the difference between budgeted sales and breakeven sales. 3. It can be expressed in terms of unit, pesos or percentage of sales. 4. Its presence indicates that the company expects profit. 5. The product of margin of safety units and unit contribution margin is the projected profit for the period. 6. The higher the margin of safety, the lower is the risk of incurring operating loss. 3 4
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.
go.3
if a company profit margin is 0.6 and the current ratio is 0.6, is it advisable to invest in the company or not?
Calculate the Break-Even Sales Amount and Sales Amount of Company X with the attached P&L (Profit & Loss) table? -Analyze and interpret X Business Sales Price (Unit) Total Sales Quantity (units) Total Sales Amount (s*unit prc.) Variable Cost (units) Total Variable Cost (b.x) Contribution Margin Total Fixed Costs P/L (Profit/Loss) Profit Margin Contribution Margin (s-b) Contribution Margin Ratio (s-b) / s 100TL / Brm. 20.000,00 2.000.000,00 75,00 1.500.000,00 500.000,00 150.000,00 350.000,00 ? 25,00 25,00% Breakeven Point (Sales Unit) (a/KP) ? Breakeven Point (Sales Amount ?
If selling price is $2.08 and cost is $1.60, what is the price/cost ratio?

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Determine the Rachel company's margin of safety as a percent of current sales. %