percentage

Quickbooks Online Accounting
3rd Edition
ISBN:9780357391693
Author:Owen
Publisher:Owen
Chapter6: Investing And Financing Activities
Section: Chapter Questions
Problem 3.5C
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Question

What is the percentage for question E?

Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
1. The unit-rate lease?
2. The flat-rate lease?
Required D
Assume an annual volume of 34,500 parts. What is the margin of safety assuming
Note: Round your answers to 1 decimal place.
Margin of Safety
58.0 %
44.1 %
Required E
< Required D
Required E >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Required C 1. The unit-rate lease? 2. The flat-rate lease? Required D Assume an annual volume of 34,500 parts. What is the margin of safety assuming Note: Round your answers to 1 decimal place. Margin of Safety 58.0 % 44.1 % Required E < Required D Required 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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