Answered: What is the company's margin of safety…

Business

Accounting

What is the company's margin of safety ratio?

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: Juniper Design Limited of Manchester, England, is a company specializing in providing design…

A: Residual income is the excess of the operating income over desired income. Desired income is the…

Q: The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim…

A: The break-even points point in units can be found by using the following formula:The dollar value…

Q: Vaughn Manufacturing reported sales of $2400000 last year (120000 units at $20 each), when the…

A: Margin of safety units = Total units sold - Break even units sold = 120000-72000 = 48000 units

Q: Juniper Design Limited of Manchester, England, is a company specializing in providing design…

A: Residual income is the amount of money or income which is in excess of the net operating income. It…

Q: Determine the company's margin of safety percentage. Round answer to the nearest whole number.

A: Margin of safety is that portion of sales which is over and above the break even point of the…

Q: Juniper Design, provides design services to residential developers. Last year, the company had net…

A: Residual income indicates an excess amount above the total amount invested and it can be calculated…

Q: Your Company's single product has a selling price of $15 per unit. Last year the company variable…

A: Given information, Selling price=$15 per unit Variable cost= $9 per unit Fixed expenses =$90,000 Net…

Q: Posters.com is a small Internet retailer of high-quality posters. The company has $890,000 in…

A: Formula Return on Investment =Net Operating Income/ Average Operating assets Sales Net…

Q: ean Company has sales of $228,000, and the break-even point in sales dollars is $157,320. Determine…

A: Margin of safety means the difference between the budget sales and breakeven sales. It means the…

Q: Bellevue Corporation sells a product for $310 per unit. The product's current sales are 14,200 units…

A: Margin of safety in units = 14,200 - 10,224 = 3,976

Q: The Spector Company has sales of $830,000, and the break-even point in sales dollars is $547,800.…

A: The objective of this question is to calculate the margin of safety as a percent of current sales…

Q: sportswear retailer reported net sales of $300,000 in year 1. Its cost of sales was $180,000 for the…

A: Percentage Increase in sales is always on the immediately preceding year. So, if sales is expected…

Q: margin of safety ratio

A: Margin of safety ratio = (Actual sales units - Break even units)*100/Actual sales units

Q: Juniper Design Limited of Manchester, England, is a company specializing in providing design…

A: The objective of the question is to calculate the residual income of Juniper Design Limited for the…

Q: Liman Corporation has a single product whose selling price is $140 and whose variable expense is $60…

A: The target profit refers to the expected amount of profit that the entity wants to achieve. The…

Q: uired 1 Required 2 plete the following table showing the relation between sales and return on…

A: Lets understand the basics. Contribution margin is a margin generated on the sales. It is a sales…

Q: Dean Company has sales of $240,000, and the break-even point in sales dollars is $127,200. Determine…

A: Margin of safety = [(Current sales - Break-Even sales)/Current sales]×100

Q: Dean Company has sales of $239,000, and the break-even point in sales dollars is $145,790. Determine…

A: Introduction:- CVP analysis is used to identify the changes in costs and volume affect a company's…

Q: For the most recent quarter, Baffle company had an after-tax profit of $62,720 from sales of 225,000…

A: Contribution margin is the difference between the sales and the variable cost. The contribution…

Q: Elmwood Manufacturing reported sales of $2,000,000 last year (100,000 units at $20 each), when the…

A: MARGIN OF SAFETYSales Above the Break-Even Point is called Margin of Safety Sales.Margin of Safety…

Q: Juniper Design, provides design services to residential developers. Last year, the company had net…

A: Residual income:Residual income is the income of the company or individual or shareholders that is…

Q: Jonick Company has sales of $740,000, and the break-even point in sales dollars is $547,600.…

A: The margin of safety is calculated as difference between current sales and break even sales.

Q: he company sales price is $35 per unit. The variable cost of production bowties is $21 per unit. The…

A: Solution:- Break-even point =Fixed cost / Contribution per unit…

Q: per to $4,600,000 per year. The company's contribution margin ratio is 11%, which means that an…

A: Return on investment is the return expected to be generated from the investment that is made. Return…

Q: Long's Log Cabins had 375 cabins available for rent every day for 2007. Average occupancy for the…

A: Part A: The computation of the ADR as follows: The formula used for the computation of the above…

Q: In 2012, Grant Co. sold 160,000 units of its product at a selling price of $40. The variable cost…

A: Profit = (Sales * PV ratiio ) - Fxed cost So, FIxed cost = ( Sales * PV ratio ) - Profit

Q: developers. Last year the company net operating income of $470,000 sales of $2,200,000. The…

A: Residual Income for the period is the difference between the net operating income and the target…

Q: Posters.com is a small Internet retailer of high-quality posters. The company has $810,000 in…

A: Contribution margin :— It is calculated by multiplying sales with contribution margin ratio. Net…

Q: Acme Company sells a product for $260 per unit. The product's current sales are 13,700 units and its…

A: The break even sales are calculated as fixed costs divided by contribution Margin Ratio. The…

Q: Blossom Corp. has annual sales totaling $1146000 and an average gross profit of 20% of cost. What is…

A: Gross profit = Sales - Cost Gross profit = Sales x Gross profit (%) So, Sales = Gross profit +…

Q: Flamengo Co is a sporting goods manufacturing company. Last year, report the following information:…

A: Profit margin refers to how much profit earn by a company from its total sales made during the year.

Question

100%

During the first quarter of the year, Waterway Industries generated sales revenue of $1440000 on sales of 60000 units of its wireless earbuds. The break-even point is 30000 units. What is the company's margin of safety ratio?

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: Variables given in question

VIEW

Step 2: Computations

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

Sphrantzes Company recently sold 175 units at a price of $650 per unit. During the same time the company reported total variable costs of $85,575 and net income of $13,975. If the company's price per unit were decreased by $35, its volume increased by 20 units and its fixed costs increased by $1,000, what would be the company's projected net income?
2. An audio equipment manufacturer produced and sold 725 sound systems and made a net income of $50, 000 last year, with a total revenue of $1, 015, 000. The manufacturer's break-even volume is 600 units. a. Calculate the selling price of each sound system. b. Calculate the variable costs for each sound system. c. Calculate the fixed costs per year.
Juniper Design Ltd. of Manchester, England, provides design services to residential developers. Last year, the company had net operating income of $430,000 on sales of $1,500,000. The company's average operating assets for the year were $1,700,000 and its minimum required rate of return was 10%. Required: Compute the company's residual income for the year. Residual income < Prev 2 of 13 Next 近
Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $460,000 on sales of $1,400,000. The company's average operating assets for the year were $1,600,000 and its minimum required rate of return was 11%. Required: Compute the company's residual income for the year. Residual income
The Rachel Company has sales of $450,000, and the break-even point in sales dollars is $292,500. Determine the company's margin of safety as a percent of current sales.fill in the blank 1 %
Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $430,000 on sales of $2,200,000. The company’s average operating assets for the year were $2,400,000 and its minimum required rate of return was 14%. Required: Compute the company’s residual income for the year.
Stratford Company distributes a lightweight lawn chair that sells for $ 40 per unit . Variable expenses are expenses total $ 672,000 annually . 40\% of sales , and fixed Required : Answer the following independent questions : 1. What is the product's CM per unit ?Refer to the original data . Assume that the company sold 44,000 units last year . The sales manager is convinced that a 7 % reduction in the selling price , combined with a increase in advertising expenditures , would increase annual unit sales by . Prepare two contribution format income statements : one showing the results of last year's operations , and one showing what the results of operations would be if these changes were made . ( Do not round intermediate calculations . Round " Per Unit " answers to 2 decimal places . ) 30\% Answer is not complete . Last Year Proposed Total Per Unit Total Per Unit Sales Less Variable expenses Contribution margin $ 24.00 $ 7.00 Less Fixed expenses Net operating income 5 - b . Would you…
Last year Minden Company introduced a new product and sold 25, 300 units of it at aprice of $99 per unit. The product's variable expenses are $69 per unit and its fixedexpenses are $837,300 per year. Required: 1. What was this product's net operatingincome (loss) last year? 2. What is the product's break - even point in unit sales anddollar sales? 3. Assume the company has conducted a marketing study that estimates itcan increase annual sales of this product by 5.000 units for each $2 reduction in itsselling price. If the company will only consider price reductions in increments of $2 (e.g$68, $66, etc.), what is the maximum annual profit that it can earn on this product?What sales volume and selling price per unit generate the maximum profit? 4. Whatwould be the break - even point in unit sales and in dollar sales using the selling pricethat you determined in requirement 3?
For the most recent quarter, Baffle company had an after-tax profit of $62,720 from sales of 225,000 units. The company’s variable costs are 60% of the selling price and fixed costs are $121,900. If the company’s tax rate is 30%, what was the selling price per unit? (Round your answer to the nearest penny): a. $0.82b. $1.57c. $2.35d. $2.05e. $1.17f. $1.37g. $1.77h. None of the above.