Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 2,920,000 pages at a

Break-Even Units and Sales Revenue: Margin of Safety

Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 2,920,000 pages at a price of $0.08 each in the coming year. Product costs include:

Direct materials $0.012
Direct labor $0.004
Variable overhead $0.002
Total fixed overhead $129,780

There is no variable selling expense; fixed selling and administrative expenses total $37,000.

Required:

In your computations that involve the contribution margin ratio, do not round the ratio.

1. Calculate the break-even point in units. fill in the blank 1 units

2. Calculate the break-even point in sales revenue. $fill in the blank 2

3. Calculate the margin of safety in units for the coming year. fill in the blank 3 units

4. Calculate the margin of safety in sales revenue for the coming year. $fill in the blank 4

5. What if the total selling and administrative expenses are reduced to $16,540? Recalculate the following:

a. Break-even point in units fill in the blank 5 units
b. Break-even point in sales revenue $fill in the blank 6
c. Margin of safety in units for the coming year fill in the blank 7 units
d. Margin of safety in sales revenue for the coming year $fill in the blank 8

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing

Authors: Alan Millichamp, John Taylor

11th Edition

1473749301, 978-1473749306

More Books

Students also viewed these Accounting questions