MARGIN OF SAFETY Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming

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MARGIN OF SAFETY Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year.

Unit variable cost is $49 (includes direct materials, direct labor, variable overhead, and variable selling expense). Total fixed cost equals $29,400 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,400.

Required:

. Calculate the margin of safety in terms of the number of units.

. Calculate the margin of safety in terms of sales revenue.

Cornerstone Exercise

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Cornerstones Of Financial Accounting Current Trends Update

ISBN: 9781111527952

1st Edition

Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen

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