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What is the margin of safety? Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the
What is the margin of safety? Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2020 Total Per Unit les (10,000 units) $500,000 $50 riable costs 300,000 30.00 Intribution margin 200,000 $20.00 (ed expenses 140,000 et income $60,000 Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places e.g. 0.2522 and final answer to 0 decimal places es 25101 (a) Assuming no changes to selling price or costs. Break-even point 7000 Break-even point $ 350000 Margin of safety $ 150000 (b1) Assuming changes to sales price and volume as described above. Break-even point 8000 Break-even point ta 38000 Margin of safety TA
What is the margin of safety?
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