Homework Answers
Answer:
Contribution Margin per unit = Selling Price – Variable
Cost
Contribution Margin per unit = $31 - $17
Contribution Margin per unit = $14
Breakeven Point in units = Fixed Cost / Contribution Margin per
unit
Breakeven Point in units = $137,200 / $14
Breakeven Point in units = 9,800
Margin of Safety in percentage = (Actual Sales in units -
Breakeven Point in units) / Actual Sales in units
Margin of Safety in percentage = (21,300 - 9,800) / 21,300
Margin of Safety in percentage = 11,500 / 21,300
Margin of Safety in percentage = 0.5399 or 53.99%
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Exercise 3-11A Margin of safety LO 3-4 Munoz Company makes a product that sells for $31...
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Gibson Company makes a product that sells for $30 per unit. The company pays $11 per...
Gibson Company makes a product that sells for $30 per unit. The
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incurs annual fixed costs of $161,500. Gibson expects to sell
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Required
Determine Gibson’s margin of safety expressed as a percentage.
(Round your answer to 2 decimal places (i.e., .2345 should
be entered as 23.45).)
Margin of safety
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company pays $11 per unit for the variable costs of the product and
incurs annual fixed costs of $161,500. Gibson expects to sell
22,600 units of product.
Required
Determine Gibson’s margin of safety expressed as a percentage.
(Round your answer to 2 decimal places (i.e., .2345 should
be entered as 23.45).)
Margin of safety
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