Dynamic Docs prepares marketing plans for growing businesses. For 2020, budgeted revenues are $3,500,000 based on 700 marketing plans at an average rate per plan of $5,000. The company would like to achieve a margin of safety percentage of at least 25%. The company's current fixed costs are $1,800,000 and variable costs average $2,000 per marketing plan. Read the requirements. Requirement 1. Calculate Dynamic Docs' breakeven point and margin of safety in units. First, determine the formula used to calculate the breakeven point in units, then calculate the number of marketing plans that must be sold to break even. Requirements = Breakeven number of units (Consider each of the following separately.) 1. Calculate Dynamic Docs' breakeven point and margin of safety in units. 2. Which of the following changes would help Dynamic Docs achieve its desired margin of safety? a. The average revenue per customer increases to $5,600. b. The planned number of marketing plans prepared increases by 8%. c. Dynamic Docs purchases new software that results in a $48,000 increase to fixed costs but reduces variable costs by $300 per marketing plan. - Х

Dynamic Docs prepares marketing plans for growing businesses. For 2020, budgeted revenues are $3,500,000 based on 700 marketing plans at an average rate per plan of $5,000. The company would like to achieve a margin of safety percentage of at least 25%. The company's current fixed costs are $1,800,000 and variable costs average $2,000 per marketing plan. Read the requirements. Requirement 1. Calculate Dynamic Docs' breakeven point and margin of safety in units. First, determine the formula used to calculate the breakeven point in units, then calculate the number of marketing plans that must be sold to break even. Requirements = Breakeven number of units (Consider each of the following separately.) 1. Calculate Dynamic Docs' breakeven point and margin of safety in units. 2. Which of the following changes would help Dynamic Docs achieve its desired margin of safety? a. The average revenue per customer increases to $5,600. b. The planned number of marketing plans prepared increases by 8%. c. Dynamic Docs purchases new software that results in a $48,000 increase to fixed costs but reduces variable costs by $300 per marketing plan. - Х

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 18E: Carmichael Corporation is in the process of preparing next years budget. The pro forma income...

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