Question
1A. If Canace Company, with a break-even point at $489,800 of sales, has actual sales of $620,000, what is the margin of safety expressed (1)
1A. If Canace Company, with a break-even point at $489,800 of sales, has actual sales of $620,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.
1. $
2. %
b. If the margin of safety for Canace Company was 30%, fixed costs were $1,656,900, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $
1B. Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $496,000, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows:
Products | Unit Selling Price | Unit Variable Cost | ||
Bats | $80 | $60 | ||
Gloves | 200 | 120 |
a. Compute the break-even sales (units) for the overall enterprise product, E. units
b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?
Baseball bats | units |
Baseball gloves | units |
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