### Margin of Safety#### a. If Canace Company, with a break-even point at $492,000 of sales, has actual sales of $600,000, 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. [Fill in the blank for dollar amount]2. [Fill in the blank for percentage] %#### b.If the margin of safety for Canace Company was 30%, fixed costs were $1,789,200, and variable costs were 70% of sales, what was the amount of actual sales (dollars)?(*Hint: Determine the break-even in sales dollars first.*)[Fill in the blank for actual sales]

Margin of safety in dollars = Actual sales - Break even sales Margin of safety in % = Margin of…

Answered: Margin of Safety a. If Canace Company,…

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.18EX

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Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,200 units × $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 264,000 132,000 132,000 147,000 $ (15,000) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $84,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $31,000 in the monthly advertising budget, will double unit…
Irn/takeAssignment/takeAssignment Main.do?inprogress=true < Margin of Safety The Rachel Company has sales of $830,000, and the break-even point in sales dollars is $556,100. Determine the Rachel company's margin of safety as a percent of current sales. % 5 O Previous
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REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000
Margin of Safety a. If Canace Company, with a break-even point at $223,200 of sales, has actual sales of $360,000, 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. $fill in the blank 1 2. fill in the blank 2% b. If the margin of safety for Canace Company was 20%, fixed costs were $1,044,800, and variable costs were 80% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$fill in the blank 3
eBook 1. $ 2. Show Me How Margin of Safety a. If Canace Company, with a break-even point at $489,900 of sales, has actual sales of $690,000, 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. % AssignmentSession Locator=&inprogress=false b. If the margin of safety for Canace Company was 30%, fixed costs were $1,178,100, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) Check My Work 2 more Check My Work uses remaining. All work saved. Previous B Next >
Margin of Safety a. If Canace Company, with a break-even point at $529,300 of sales, has actual sales of $670,000, 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. $fill in the blank 1 2. fill in the blank 2% b. If the margin of safety for Canace Company was 35%, fixed costs were $1,685,775, and variable costs were 65% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)
Question 2
1.) what is the break-even in dollar sales? 2.) what is the margin of safety percentage? 3.) what is the degree of operating leverage ? (Round your answer to 2 decimal places.) 4.) using the degree of operating leverage and without changing anything, calculate the percentage change in net operating income if unit sales increase by 20% ?
Question 3.2.1 Use the attached information to calculate the following The selling price per unit that will realize an operating profit of R720000 3.2. 2 The number of units that must be sold in order to earn an operating profit of R720000, if the selling price increases by 10% and fixed costs increase by R87000
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Problem 2 The price and cost data shown in the table below are for each of the three firms, F, G and H. Firm F G H Sale price per $18.00 $21.00 $30.00 wait Variable operating cost $6.75 $13.50 $12.00 per unit Fixed operating $45,000 $30,000 $90,000 cost Operating breakeven point Rank (1st, 2nd, or 3rd) (a) What is the operating breakeven point in units for each firm? Fill in the blanks in the table above. (b) How would you rank these firms in order from most risky to least risky? Fill in the blanks in the table above.

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