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Need some help with the margin of safety ratio % thanks! Sunland Corporation has collected the following information after its first year of sales. Sales
Need some help with the margin of safety ratio %
thanks!
Sunland Corporation has collected the following information after its first year of sales. Sales were $ 1,410,000 on 94,000 units; selling expenses $ 235,000 (40% variable and 60% fixed); direct materials $ 480,340; direct labor $ 272,600; administrative expenses $ 253,800 (20% variable and 80% fixed); and manufacturing overhead $ 329,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. (a) Your answer is correct. Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.) (1) Contribution margin for current year $ 282000 Contribution margin for projected year 310200 (2) Fixed costs for current year 442740 eTextbook and Media Attempts: 1 of 5 used (b) Your answer is correct. Compute the break-even point in sales units and sales dollars for the first year. (Round contribution margin ratio to 1 decimal place e.g. 0.5 and final answers to O decimal places, e.g. 2,510.) Break-even point 147580 units Break-even point $ 2213700The company has a target net income of $ 138,000. What is the required sales in dollars for the company to meet its target? Sales dollars required for target net income $ $3,153,700 eTextbook and Media Attempts: 1 of 5 used (d) X Your answer is incorrect If the company meets its target net income number+ by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio? [Roundanswa' to 2 decimal plum 93. 10.5%.) Margin of safetyr ratio 96Step by Step Solution
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