1. Determine the break-even point. 2 Compute the margin of safety and explain its significance. 3....

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1. Determine the break-even point. 2 Compute the margin of safety and explain its significance. 3. Compute the degree of oper

Given the following information complete a Cve analysis 2 for JPL, Inc.: 4 Unit sales 5 Selling price per unit 6 Variable exp

19 2. Compute the break-even point 20 Break-even in unit sales 21 Break-even in dollar sales Units 23 3. Compute the margin o

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Answer 1

Answer #1

1)

selling Price per unit	75.00
Variable Expenses Per unit	45.00
Contribution Margin per unit	30.00

CM Ratio	40%
Variable Expense Ratio	60%

2)

Break even in unit sales =210,000/30 = 7,000

Break even in Dollar Sales = 210,000/40% = 525,000

3) Margin of Safety in dollars = (11,200 x 75) - 525,000

=315,000

Margin of Safety percentage = 315,000/840,000

=37.5%

4)

Sales	840,000.00
Variable Expense	504,000.00
Contribution Margin	336,000.00
Fixed Expense	210,000.00
Net Operating income	126,000.00

Degree of Operating leverage	2.67

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Answer 2

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