1. Margin of safety

Organic Health Care Products Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during 20Y8. A summary report of these estimates is as follows:

	Estimated Fixed Cost		Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials				$ 8.00
	Direct labor				3.00
	Factory overhead	$ 200,000			1.50
Selling expenses:
	Advertising	1,450,000
	Sales salaries and commissions	93,000			1.85
	Travel	340,000
	Miscellaneous selling expense	2,000			0.10
Administrative expenses:
	Office and officers' salaries	300,000
	Supplies	10,000			0.50
	Miscellaneous administrative expense	5,000			0.05
	Total	$2,400,000			$15.00

It is expected that 400,000 units will be sold at a price of $25 a unit. Maximum sales within the relevant range are 500,000 units.

Determine the following based upon the estimates for 20Y8:

1. Margin of safety for 20Y8 in units of sales.		fill in the blank 1	units
2.Margin of safety for 20Y8 in dollars of sales.		$fill in the blank 2
3.Margin of safety for 20Y8 expressed as a percentage of sales.		fill in the blank 3	%

2. Question Content Area

Relevant Range and Fixed and Variable Costs

FirstClass Gaming Inc. manufactures components for computer games within a relevant range of 114,000 to 182,400 components per year. Within this range, the following partially completed manufacturing cost schedule has been prepared:

Components produced	114,000		144,000		182,400
Total costs:
	Total variable costs	$49,020		(d)		(j)
	Total fixed costs	54,720		(e)		(k)
	Total costs	$103,740		(f)		(l)
Cost per unit:
	Variable cost per unit	(a)		(g)		(m)
	Fixed cost per unit	(b)		(h)		(n)
	Total cost per unit	(c)		(i)		(o)

Complete the cost schedule below. Round costs per unit to the nearest cent.

Cost Schedule
Components produced	114,000		144,000		182,400
Total costs:
	Total variable costs	$49,020		$fill in the blank 1		$fill in the blank 2
	Total fixed costs	54,720		fill in the blank 3		fill in the blank 4
	Total costs	$103,740		$fill in the blank 5		$fill in the blank 6
Cost per unit:
	Variable cost per unit	$fill in the blank 7		$fill in the blank 8		$fill in the blank 9
	Fixed cost per unit	fill in the blank 10		fill in the blank 11		fill in the blank 12
	Total cost per unit	$fill in the blank 13		$fill in the blank 14		$fill in the blank 15

3. Question Content Area

Job Cost Sheet

Hallmark Furniture Company refinishes and reupholsters furniture. Hallmark Furniture uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs.

On February 14, 20Y1, an estimate of $2,834 for reupholstering a chair and couch was given to Millard Schmidt. The estimate was based on the following data:

Estimated direct materials:
40 meters at $30 per meter	$ 1,200
Estimated direct labor:
28 hours at $20 per hour	560
Estimated factory overhead (75% of direct labor cost)	420
Total estimated costs	$2,180
Markup (30% of production costs)	654
Total estimate	$2,834

On February 17, the chair and couch were picked up from the residence of Millard Schmidt, 315 White Oak Drive, Columbus, Georgia, with a commitment to return them on March 15. The job was completed on March 9.

The related materials requisitions and time tickets are summarized as follows:

Materials Requisition No.	Description	Amount
122	20 meters at $30	$600
129	24 meters at $30	720

Time Ticket No.	Description	Amount
T344	14 hours at $20	$280
T348	18 hours at $20	360

Instructions:

1. Complete the portion of the job cost sheet that would be prepared when the estimate is given to the customer.

2. Assign number 02-019 to the job, record the actual costs incurred, and complete the job cost sheet.

JOB COST SHEET

Customer	Millard Schmidt		Date	February 14, 20Y1
Address	315 White Oak Drive		Date wanted	March 15, 20Y1
	Columbus, GA		Date completed	March 9, 20Y1
Item	Reupholster couch and chair		Job. No.	02-019
ESTIMATE

Direct Materials

Direct Labor

Summary

Amount

Amount

Amount

40 Meters at $30

$fill in the blank 1

28 Hours at $20

$fill in the blank 2

Direct Materials

$fill in the blank 3

Direct Labor

fill in the blank 4

Factory Overhead

fill in the blank 5

Total

$fill in the blank 6

Total

$fill in the blank 7

Total cost

$fill in the blank 8

ACTUAL

Direct Materials

Direct Labor

Summary

Mat. Req. No.

Description

Amount

Time Ticket No.

Description

Amount

Item

Amount

122

20 Meters at $30

$fill in the blank 9

T344

14 Hours at $20

$fill in the blank 10

Direct Materials

$fill in the blank 11

Direct Labor

fill in the blank 12

129

24 Meters at $30

fill in the blank 13

T348

18 Hours at $20

fill in the blank 14

Factory Overhead

fill in the blank 15

Total

$fill in the blank 16

Total

$fill in the blank 17

Total Cost

$fill in the blank 18

can i have your assistance plz