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Margin of safety a. If Kirwan Company, with a break-even point at $308,000 of sales, has actual sales of $560,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1. S 2. X X % b. If the margin of safety for Kirwan Company was 30%, fixed costs were $1,818,600, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)

Margin of safety a. If Kirwan Company, with a break-even point at $308,000 of sales, has actual sales of $560,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1. S 2. X X % b. If the margin of safety for Kirwan Company was 30%, fixed costs were $1,818,600, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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eBook Margin of safety a. If Kirwan Company, with a break-even point at $308,000 of sales, has actual sales of $560,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1. S 2. Show Me How X X % Feedback b. If the margin of safety for Kirwan Company was 30%, fixed costs were $1,818,600, 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 a. (Sales minus sales at break-even) divided by sales equals margin of safety. b. Sales minus variable costs equals contribution margin. Fixed costs divided by unit contribution margin equals break-even point. (Sales minus sales at break-even) divided by sales equals margin of safety G
Transcribed Image Text:eBook Margin of safety a. If Kirwan Company, with a break-even point at $308,000 of sales, has actual sales of $560,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1. S 2. Show Me How X X % Feedback b. If the margin of safety for Kirwan Company was 30%, fixed costs were $1,818,600, 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 a. (Sales minus sales at break-even) divided by sales equals margin of safety. b. Sales minus variable costs equals contribution margin. Fixed costs divided by unit contribution margin equals break-even point. (Sales minus sales at break-even) divided by sales equals margin of safety G
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