Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution margin 300,000 Less fixed cost 240,000 Net income 60,000 What is the current Margin of Safety of the company? O none of the above O 20 percent O 50 percent O 30 percent O 40 percent

Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution margin 300,000 Less fixed cost 240,000 Net income 60,000 What is the current Margin of Safety of the company? O none of the above O 20 percent O 50 percent O 30 percent O 40 percent

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: XYZ company has sales of $260,000, a contribution margin ratio of 60%, and a target profit of…

A: Option e. $6.93 is correct Given Sales = 260000 Contribution Ratio = 60% Profit =30000 Total Sale…

Q: Z Company plans to discontinue a department with the following average monthly operating results:…

A: Lets understand the basics. In cost accounting, management needs to choose between various…

Q: Margin of Safety a. If Canace Company, with a break-even point at $223,200 of sales, has actual…

A: The margin of safety sales are excess of actual sales over break even sales.

Q: McKay Company The following information relates to financial projections of McKay Company: Projected…

A: The break-even sales are calculated as the fixed costs divided by the contribution margin ratio. The…

Q: Margin of Safety a. If Canace Company, with a break-even point at $464,000 of sales, has actual…

A: Margin of safety refers computation of how much output or sales level can fall before a business…

Q: a. If Canace Company, with a break-even point at $331,200 of sales, has actual sales of $480,000,…

A: The margin of safety is the difference between break-even sales and Actual Sales. Break-even sales…

Q: a. If Del Rosario Company, with a break-even point at $455.000 of sales, has actual sales of…

A: Margin of safety % = Margin of safety / sales where, Margin of safety = Total sales - break even…

Q: Sales Contribution margin Total direct fixed costs Total operating assets Jan. 1, 2022 $1248000…

A: Formula used: ROI = Net profit / Average Operating Assets. Division of Average operating assets with…

Q: Fountain Corporation has a selling price of $10 per unit and variable costs of $5.30 per unit. When…

A: Margin of safety is the amount which is determined by deducting the breakeven sales from the sales…

Q: [The following information applies to the questions displayed below.] Data for Hermann Corporation…

A: In the given question, it is specified that if higher quality material is used:· Variable cost…

Q: Calculate the Margin of Safety, expressed as a percentage of Sales, given the following data: Sales…

A: Formula, Margin of Safety (Dollars) = Actual Sales - Break Even Sales Margin of Safety…

Q: Compute the company's margin of safety in both dollars and percentage terms? Per unit…

A: Margin of safety sales = Total sales - Break even sales Margin of safety in percentage = Margin of…

Q: Pepper Industries has three product lines, A, B, and C. The following information is available:…

A: There are multiple types of business costs. The three main costs are known as variable costs, fixed…

Q: Just A Company (JAC) 225 units at $100 per unit Variable cost $20 per unit Contribution margin =…

A: Cost volume profit analysis is the technique used by management for decision-making. The methods…

Q: XYZ Co. has a contribution margin of $450,000 and profit of $150,000. If sales increase 10%, by how…

A: Increase in profit = current contribution margin x increase in sales % = 450000 x 10% = $45000

Q: High-Low Method for a Service Company Boston Railroad decided to use the high-low method and…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution…

A: Formulas: Increase in net operating income % = (Expected net operating income - Current net…

Q: Sales (65000 units) 15,600,000 Variable cost 8,736,000 Contribution Margin 6,864,000 Fixed Costs…

A: The degree of operating leverage (DOL) is a measure used to evaluate how a company's operating…

Q: Are these answers correct?

Q: What is the incremental profit?

A: Incremental profit is the additional profit gained due to a managerial decision taken. In this case,…

Q: Saved Metet, Inc. has fed costs of $257,000, sales price of $54, and variable cost of $32 per unit…

A: Break even point means where there is no profit no loss. Variable cost means the cost which vary…

Q: Assume the following cost information for Standard Corporation: Selling price per unit Variable…

A: The Break-even point indicates that total units are to be sold by the business entity to recover its…

Q: Margin of safety a. If Kirwan Company, with a break-even point at $435,200 of sales, has actual…

A: Break Even Point :— It is the point of production where total cost is equal to total revenue. At…

Q: a. If Del Rosario Company, with a break-even point at $552,000 of sales, has actual sales of…

A: Margin of safety = Total actual sales - break even sales

Q: Zot Corporation has provided the following contribution format income statement Revenue (500 units)…

A: The operating profit is essentially the base level profit derived by deducting operating expenses…

Q: The following data pertain to Wistron Company's two products: Product X Product Y Sales in dollars…

A: The break-even point is the level of sales or revenue at which a business covers all its costs,…

Q: Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution…

A: Operating leverage indicates the ability of the business to manage the fixed and variable costs to…

Q: SALES $8 per unit $160,000 LESS: VARIABLE EXPENCES (128,000) Contribution margin $32,000 LESS:…

A: Break-even analyses are used for decision-making in almost every organization. the management can…

Q: Angela Company is concerned about its operating performance, as summarized below: Revenues (P12.50…

A: Break even is point at which an entity is in situation of no profit no loss. It is the point whereby…

Q: Assume the following information: Amount Per Unit Sales $ 300,000 $ 40 Variable…

A: The measurement of net operating income (NOI) is used to assess the viability of income-generating…

Q: Required: You need to evaluate the proposals by showing all the relevant workings and present this…

A: Some important factors considered in this > Sales , direct material,> Sales , direct material,…

Q: Company XYZ currently produces and sells 40,000 units. At this level, the total contribution margin…

A: The contribution margin per unit remains the same at all the sales level as the variable costs will…

Q: A company has three product lines, one of which has the following results: Sales $214000 Variable…

A: Income statement shows the net income or net loss calculated by deducting the expenses from the…

Question

Sales (20,000 units @ 60 per unit) $1,200,000
Less: Variable cost 20,000@ $45 900,000
Contribution margin 300,000
Less fixed cost 240,000
Net income 60,000
What is the current Margin of Safety of the company?
O none of the above
O 20 percent
O 50 percent
O 30 percent
O 40 percent

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The margin of safety in the Flaherty Company is $28,400. If the company's sales are $129,000 and its variable expenses are $80,000, what must its fixed expenses be? Question 19Answer a. $129,000 b. $28,400 c. $264,845 d. $38,208
Fast solve plz
What is the answer for number 39?
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. $ 2. % 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.)
3. Breakeven point analysis Our company's activity is characterised by the following basic information: 15000 pcs 320 $/pc 440 $/pc Quantities produced (Q): Variable cost /unit (vc): Price (P): 20% of the total cost is fixed cost a) Determine the breakeven point of the business! b) What should be the volume of production to ensure a profit of 450 000 $?
a. If Canace Company, with a break-even point at $244,200 of sales, has actual sales of $370,000, 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 40%, fixed costs were $1,627,200, and variable costs were 60% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) %24
do not give solution in image
A. Determine the missing amounts S.No Unit Selling Price Unit Variable Cost Contribution Margin per unit Contribution Margin Ratio 1 2 3 550 1500 (e) 370 (c) (f) (a) 600 900 (b) (d) 30 B. For Al Farabi Company, variable costs are 75% of sales, and fixed costs are $210,000.Management’snet income goal is $70,000. Compute the required sales needed to achieve management’s target net income of $70,000. (Use the mathematical equation approach.) C. Company A’s costs are mostly variable, whereas Company B’s costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.
a. If Canace Company, with a break-even point at $368,000 of sales, has actual sales of $460,000, 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 45%, fixed costs were $1,935,450, and variable costs were 55% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$fill in the blank 3
Using this information, what is Your Company's expected total contribution margin when 5,000 units are sold? Expected sales in units 5,000 Sales price per unit $20 Margin of safety in units 3,750 Expected Breakeven Contribution margin ratio 35% $35,000 $48,750 $65,000 $26,250