Chapter 3 Question 2 Cost ACCt

Exercise 3-41 (Algo) CVP and Margin of Safety (LO 3-1, 2)

Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $26.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $24.40. The annual fixed cost for GGN is $16,680.

Required:

How many cases must Golden Gate Novelties sell every year to break even?

Note: Do not round intermediate calculations.

The owner of GGN believes that the company can sell 13,900 chains a year. What is the margin of safety in terms of the number of chains?

a. Break-even point		chains
b. Margin of safety		chains

need chart answered asap part a and b