Scott Austen is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64ounce tubs. Scott can buy the premium wax at a wholesale cost of $33 per tub. He plans to sell the premium wax for $73 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $720 per car show. Read the @uirements. .IIII- _ontribution margin :: Net' Income (loss) Requirement 3. Determine the margin of safety between the sales volume at the breakeven point and the sales volume required to earn the desired prot. Determine the margin of safety in both sales dollars, units, and as a percentage. Begin by identifying the formula to compute the margin of safety in dollars. Target sales in dollars _ Breakeven sales in dollars v = Margin of safety in dollars The margin of safety in dollars is |:| . Now identify the formula to compute the margin of safety in units Target sales in units _ Breakeven sales in units v = Margin of safety in units The margin of safety in units is units. Now identify the formula to compute the margin of safety as a percentage. Margin of safety as a Margin of safety in dollars + Target sales in dollars v : percentage of target sales The margin of safety as a percentage of target sales is |:| %. Scott Austen is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64ou nce tubs. Scott can buy the premium wax at a wholesale cost of $33 per tub. He plans to sell the premium wax for $73 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $720 per car show. Read the muirements. Requirement 1. Determine the number of tubs Scott must sell per show to break even. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. Sales in ( Operating income + )+ Contribution margin per unit v = units Scott must sell tubs per show to breakeven. Requirement 2a. Determine the sales volume in units necessary to earn the desired profit assuming Scott wants to earn a prot of $1,080 per show. Scott must sell tubs per show to earn a prot of $1,080 per show. b. Determine the sales volume in dollars necessary to earn the desired prot assuming Scott wants to earn a prot of 1,080 per show. Begin by identifying the formula to compute the sales volume in dollars necessary to earn the desired prot. Sale price per unit x Target sales in units v = Target sales in dollars Scott must achieve sales of 3285 to earn a prot of $1,080 per show. c. Using the contribution margin format, prepare an income statement (condensed version) to conrm your answers to parts a and b. Scott Austen is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64ounce tubs. Scott can buy the premium wax at a wholesale cost of $33 per tub. He plans to sell the premium wax for $73 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $720 per car show. Read the muirements. c. Using the contribution margin format, prepare an income statement (condensed version) to conrm your ' answers to parts a and b. Condensed Income Statement Less: Variable costs 1485 _ontribution margin 8: Net' Income (loss) Requirement 3. Determine the margin of safety between the sales volume at the breakeven point and the sales volume required to earn the desired prot. Determine the margin of safety in both sales dollars, units, and as a percentage. Begin by identifying the formula to compute the margin of safety in dollars. Target sales in dollars _ Breakeven sales in dollars v : Margin of safety in dollars The margin of safety in dollars is :l . Now identify the formula to compute the margin of safety in units Target sales in units _ Breakeven sales in units 1 = Margin of safety in units The margin of safety in units is units