What is the percentage for question E? Complete this question by entering your answers in the tabs below.Required A Required BRequired C1. The unit-rate lease?2. The flat-rate lease?Required DAssume an annual volume of 34,500 parts. What is the margin of safety assumingNote: Round your answers to 1 decimal place.Margin of Safety58.0 %44.1 %Required E< Required DRequired E >

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Business

Accounting

percentage

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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Question

What is the percentage for question E?

Expert Solution

Step 1: Calculating Margin of safety in units

Margin of safety = Actual sales volume- Breakeven sales volume

Actual sales volume = 34,500.

UNIT RATE LEASE OPTION:

As calculated, Breakeven sales volume = 18,225.

So, MOS = 34,500 - 18,225 = 16,275.

FLAT RATE LEASE OPTION:

As calculated, Breakeven sales volume = 19,080

So, MOS = 34,500- 19,080 = 15,420.

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