LO20-5) The following information relates to the only product sold by Mastrolia Manufacturing. Sales price per unit Variable cost per unit Fixed costs per year 45 27 294, 000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars). a. Contribution margin ratio Break even sales dollars b. Margin of safety (in dollars)
LO20-5) The following information relates to the only product sold by Mastrolia Manufacturing. Sales price per unit Variable cost per unit Fixed costs per year 45 27 294, 000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars). a. Contribution margin ratio Break even sales dollars b. Margin of safety (in dollars)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Computing
Transcribed Image Text:Margin of Safety (LO20-4, L020-5)
The following information relates to the only product sold by Mastrolia Manufacturing.
Sales price per unit
Variable cost per unit
Fixed costs per year
$.
45
27
294,000
a. Compute the contribution margin ratio and the dollar sales volume required to break even.
b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
a.
Contribution margin ratio
%
Break even sales dollars
b. Margin of safety (in dollars)
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