Can you please explain me step by step how to solve itThank you 9 The graph below shows the CVP Graph of Bernard company.Profits ($)Units (Q)4,000 units-30,000If the profit is $7,500, what is the margin of safety percentage?А.10.0%В.13.3%С.20.0%D.25.0%Е.30.0%

Answered: If the profit is $7,500, what is the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Can you please explain me step by step how to solve it

Thank you

9 The graph below shows the CVP Graph of Bernard company.
Profits ($)
Units (Q)
4,000 units
-30,000
If the profit is $7,500, what is the margin of safety percentage?
А.
10.0%
В.
13.3%
С.
20.0%
D.
25.0%
Е.
30.0%

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Introduction:

The break even point (break-even price) for a transaction or investment is found by comparing the market price of an item to the initial cost; the break even point is reached when the two prices are equal. In corporate accounting, the break even point formula is calculated by dividing the entire fixed costs involved with manufacturing by the revenue per individual unit minus the variable expenses per unit. Fixed costs are those that do not change regardless of the number of units sold. In other words, the break even point is the moment at which total revenues for a product equal total costs.

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