Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below: Selling price per unit $ 29 Variable expense per unit $ 18 Fixed expense per month $ 8,800 Unit sales per month 950 Required: 1. What is the company’s margin of safety? (Do not round intermediate calculations.) 2. What is the company’s margin of safety as a percentage of its sales?

Answers

Answer 1
Answer:

Answer:

Instructions are below.

Explanation:

Giving the following information:

Selling price per unit $29

Variable expense per unit $18

Fixed expense per month $8,800

Unit sales per month 950

First, we need to calculate the break-even point in units and dollars:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 8,800 / (29 - 18)

Break-even point in units= 800 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 8,800 / (11/29)

Break-even point (dollars)= $23,200

Now, the margin of safety in units and dollars:

Margin of safety (units)= (current sales level - break-even point)

Margin of safety (units)= 950 - 800

Margin of safety (units)= 150 units

Margin of safety (dollars)= (current sales level - break-even point)

Margin of safety (dollars)= (950*29 - 23,200)

Margin of safety (dollars)= $4,350

Finally, the margin of safety ratio:

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio= 4,350/27,550

Margin of safety ratio= 0.16 = 16%


Related Questions

The extra amount of satisfaction that you receive from an additional slice of pizza is part of the _____ .marginal benefit marginal cost marginal revenue
Which describes an apartment? not attached to any other houses and intended for one household attached to other houses in a long row in a building that is owned by a landlord housing owned by shareholders
The executive branch has many parts. Name one.
If the actual unemployment rate (U) is greater than the natural rate of unemployment (UN), a(n): Multiple Choice recessionary gap exists and actual real GDP (QE) is less than natural real GDP (QN). inflationary gap exists and actual real GDP (QE) is greater than natural real GDP (QN). inflationary gap exists and actual real GDP (QE) is less than natural real GDP (QN). recessionary gap exists and actual real GDP (QE) is greater than natural real GDP (QN).
What is a fringe benefit?a. a cash payment for casual work b. a business other than sales or marketing c. a payment other than wages or salaries d. an accounting term meaning profits

Automation of a process activity consists of moving work from the ________ of the symmetrical five-component framework.

Answers

Answer:

human side to computer side

Explanation:

Automation of a process activity consists of moving work from the human side to computer side of the symmetrical five-component framework.

Money markets are markets for_________.a. Long-term bonds.
b. Consumer automobile loans.
c. Common stocks.
d. Foreign currencies.
e. Short-term debt securities such as Treasury bills and commercial paper.

Answers

Answer:

e. Short-term debt securities such as Treasury bills and commercial paper.

Explanation:

The money market is a branch of financial markets that trade in short-term, high liquidity debt instruments. The money markets create an opportunity for investors and borrowers to buy and sell different types of short term financial securities. The short-term securities maturity period ranges from one day to less than 12 months.

The securities that trade in market markets are called money market instruments. They include commercial papers, Eurodollar deposits, treasury bills, federal agency notes, and certificates of deposit. The money markets are important because they enable companies with temporary financial shortfalls to borrow money by selling money market instruments. They also give companies with cash surplus a platform to invest and earn interests.

Final answer:

Money markets are for trading short-term debt securities, like Treasury bills and commercial paper, not for long-term bonds, consumer loans, common stocks, or foreign currencies. The correct answer is 'e' which refers to short-term debt securities.

Explanation:

Money markets are financial markets primarily for trading short-term debt securities, including Treasury bills and commercial paper. These are instruments that mature in less than one year and are used by participants as a means for borrowing and lending in the short term. A capital market, on the other hand, is where money is loaned for more than one year, and may include corporate bonds, government bonds, and long-term certificates of deposit.

The correct answer to the multiple-choice question is e. Short-term debt securities such as Treasury bills and commercial paper. Money market accounts, which are part of M2 (a classification of money supply), offer instruments like T-bills, which are low-risk and have maturities ranging from a few weeks to a year. Additionally, commercial paper is an unsecured short-term debt instrument issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Learn more about Money Markets here:

brainly.com/question/32114875

#SPJ6

Please Help!!!If someone dies without a will, a situation known as intestate, the state will step in to handle the distribution of the estate, even if it is not what you may have wanted. True or False

Answers

true is your answer.

Citrus inc., a leading internet service provider, provides its top managers with a bonus every year. however, this year the company performed poorly and its average stock price dropped below the industry standards. the company decided not to reward the managers this time around. this scenario typically illustrates the reinforcement contingency of _____. a) positive reinforcement
b) extinction punishment
c) negative reinforcement

Answers

Answer: The correct answer is "b) extinction punishment".

Explanation: This scenario typically illustrates the reinforcement contingency ofextinction punishment.

Because the company in deciding not to reward managers this time, is extinguishing the benefit they had, in the form of punishment for the poor performance of the company.

How long do you have to pay back a short term debt?4 months

8 months

2 months

all of the above

Answers

i think that the answer is D all of the above

Answer: D: All of the above

Explanation:I believe it goes up to one year to be short term dept

expansionary monetary policy lowers , and increases demand for investment and consumer borrowing, which shifts aggregate demand to the . a. interest rates; right b. rates of return; left c. rates of return; right d. exchange rates; left

Answers

Expansionary monetary policy is an economic strategy that is implemented by the central bank to stimulate economic growth by increasing the money supply and lowering interest rates. The correct option Option A.

This policy is designed to increase investment and consumer borrowing in the economy, thereby increasing demand and shifting the aggregate demand curve to the right.

When interest rates are lowered, it becomes easier and cheaper for businesses and individuals to borrow money. This encourages increased investment and consumption, which stimulates economic growth. Lower interest rates also make saving less attractive, which can lead to increased spending and investment. As a result, aggregate demand shifts to the right.

The correct answer to the question is (a) interest rates; right. Expansionary monetary policy lowers interest rates, which increases demand for investment and consumer borrowing, and shifts aggregate demand to the right. This policy can be used to combat recession or slow economic growth by stimulating demand and increasing economic activity.

Overall, expansionary monetary policy can have a positive impact on the economy by increasing demand and promoting economic growth. However, it can also lead to inflation if the increase in demand outpaces the supply of goods and services, and the economy overheats.

Therefore, central banks must carefully balance the benefits of expansionary monetary policy with the potential risks of inflation. The correct option Option A. . interest rates; right

To learn more about monetary policy here:

brainly.com/question/1156377#

#SPJ11