Margin of Safetya. If Canace Company, with a break-even point at $383,400 of sales, has actual sales of $540,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.1. $2.%b. If the margin of safety for Canace Company was 20%, fixed costs were $1,228,800, and variable costs were 80% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 23E

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Margin of Safety a. If Canace Company, with a break-even point at $463,600 of sales, has actual sales of $610,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2. % b. If the margin of safety for Canace Company was 30 %, fixed costs were $1,236,900, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) Previous Check My Work 2 more Check My Work uses remaining.
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a. If Canace Company, with a break-even point at $671,500 of sales, has actual sales of $850,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. b. If the margin of safety for Canace Company was 30%, fixed costs were $1,436,400, and variable costs were 70% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)

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