Para Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $2,475,000 based on 550 marketing plans at an average rate per plan of $4,500. The company would like to achieve a margin of safety percentage of at least 40%. The company's current fixed costs are $1,540,000 and variable costs average $1,000 per marketing plan. Read the requirements. Requirement 1. Calculate Para Docs' breakeven point and margin of safety in units. First, determine the formula used to calculate the breakeven point in units, then calculate the number of marketing plans that must be sold to break even. = Breakeven number of units Para Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $2,475,000 based on 550 marketing plans at an paraan rata naonlon af 600 The company would like to achieve a margin of safety percentage of at least 40%. The company's current fixed costs average $1,000 per marketing plan. Contribution margin per unit Fixed costs Selling price ocs' breakeven point and margin of safety in units. | Target operating income o calculate the breakeven point in units, then calculate the number of marketing plans that must be sold to break (Variable cost per unit - = Breakeven number of units = Now, determine the formula used to calculate the margin of safety in units, then calculate the result. Margin of safety in units II Margin of safety in units ve its desired margin of safety? a. Average revenue per customer es by 10%: c. Para Docs purchases new software that results in a Breakeven quantity Requirement 2. Which of the following cl increases to $5,000: b. Planned number Budgeted sales quantity Contribution margin per unit Choose from any list or enter any numb Fixed costs Variable costs ntinue to the next question. ? Requirement 2. Which of the following changes would help Para Docs achieve its desired margin of safety? a. Average revenue per customer increases to $5,000; b. Planned number of marketing plans prepared increases by 10%; c. Para Docs purchases new software that results in a 4% increase to fixed costs but reduces variable costs by 8% per marketing plan. (Round all margin of safety percentages to the nearest whole percent, X.X%. Round breakeven units up to the next whole unit.) First, calculate the current margin of safety percentage. = Margin of safety percentage % a. The average revenue per customer increases to $5,000. %. Para Docs' breakeven number of units is now plans and its margin of safety percentage is now This change help Para Docs achieve its desired margin of safety of 40%. b. The planned number of marketing plans prepared increases by 10%. %. Para Docs' breakeven number of units is now plans and it's margin of safety percentage is now This change help Para Docs achieve its desired margin of safety of 40%
