Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula : C o n t r i b u t i o n m a r g i n = ( S a l e s p r i c e – V a r i a b l e c o s t p e r u n i t ) S a l e s p r i c e Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula: B r e a k e v e n p o i n t ( U n i t s ) = T o t a l F i x e d C o s t ( S a l e s p r i c e p e r u n i t – V a r i a b l e c o s t p e r u n i t ) Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows: M a r g i n o f s a f e t y ( $ ) = A c t u a l S a l e s – B r e a k e v e n s a l e s M a r g i n o f s a f e t y ( % ) = ( A c t u a l S a l e s – B r e a k e v e n s a l e s ) A c t u a l S a l e s 1. To determine: Margin of Safety in Dollar amount

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Answer 1

Question

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

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What is the amount of total assets?

The equipment was sold for $60,000 The equipment was originally purchased for $33,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment.

Answer 2

Question

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Answer 6

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Answer 7

Chapter 21, Problem E21.43E

To determine

Concept Introduction:

Contribution margin: Contribution margin is the % of contribution over sales. It is calculated with the help of following formula:

$C o n t r i b u t i o n m a r g i n = \frac{(S a l e s p r i c e - V a r i a b l e c o s t p e r u n i t)}{S a l e s p r i c e}$

Breakeven point: Breakeven point is the level of output at which the sales is equal to the total cost and there is no profit or loss. Breakeven point in units is calculated with the help of following formula:

$B r e a k e v e n p o i n t (U n i t s) = \frac{T o t a l F i x e d C o s t}{(S a l e s p r i c e p e r u n i t - V a r i a b l e c o s t p e r u n i t)}$

Margin of Safety: Margin of safety is sales over and above the breakeven level. Margin of safety can be calculated as dollar amount and in units as follows:

$M a r g i n o f s a f e t y ($) = A c t u a l S a l e s - B r e a k e v e n s a l e s$

$M a r g i n o f s a f e t y (%) = \frac{(A c t u a l S a l e s - B r e a k e v e n s a l e s)}{A c t u a l S a l e s}$

1. To determine: Margin of Safety in Dollar amount

Answer 8

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Answer 9

Expert Solution & Answer

Answer 10

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Answer 11

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