CVP analysis, margin of safety Suppose Latin Corp.s breakeven point is revenues of $1,500,000. Fixed costs are

Question:

CVP analysis, margin of safety Suppose Latin Corp.’s breakeven point is revenues of $1,500,000. Fixed costs are $600,000.

1. Compute the contribution margin percentage.

2. Compute the selling price if variable costs are $15 per unit

3. Suppose 80,000 units are sold. Compute the margin of safety in units and dollars.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...