Question

Chapter 9 Assignment Saved Help Save & Exit Submit Check my work Harold McWilliams owns and manages a general merchandise store in a rural area of Virginia. Harold sells appliances, clothing, auto parts, and farming equipment, among a wide variety of other types of merchandise. Because of normal seasonal and cyclical fluctuations in the local economy, he knows that his business will also have these fluctuations, and he is planning to use CVP analysis to help him understand how he can expect his profits to change with these fluctuations. Harold has the following information for his most recent year. Cost of goods sold represents the cost paid for the merchandise he sells, while operating costs represent rent, insurance, and salaries, which are entirely fixed. 0.25 points (8 03:33:40 Sales Cost of merchandise sold Contribution margin Operating costs Operating profit $ 600,000 384,000 216,000 95,400 $ 120,600 eBook References Required: 1-a. What is Harold's margin of safety (MOS) in dollars? (Do not round intermediate calculations.) 1-b. What is the margin of safety (MOS) ratio? (Input your answer as a percentage rounded to 2 decimal places (i.e., 0.1567 = 15.67%).) 3. What is Harold's margin of safety in dollars) and operating profit if sales should fall to $525,000? (Do not round intermediate calculations.) 1-b. 1-a. Margin of safety (MOS) MOS ratio 3. Margin of safety Operating profit

Answer 1

SeloHon Mangin Sajety( in dolans) SalesBreak evn saler 1-a 6ooס 265000 335000 Working Nots: Contibu Hon Margin tato Contibutton MargenSale loo 216000 60000o X loo 11 36 % areak even Sales fxed Cot/ mtbutton pertng atto 5400/ 36% 265000

Mmgia aety/ses xloo / |-b Mangin Sety rato = 6O0000 X 100 335000 56 SalesBreak even sale Margin salety n otlar) 3. 5२5००0 - 2650०० 26000o Sales x Contbutton eperaking pt Magi Radtio)-patng cot 525000 X 36- 95400 13600