What was a company's margin of safety? 

 A firm estimates that it will sell 100,000 units of its sole product in the coming period. It projects the sales price at $40 per unit, the CM ratio at 60 percent, and profit at $500,000. What is the firm budgeting for fixed costs in the coming period? Refer to Brittany Company. If the unit sales price for Brittanys sole product was $10, how many units would it have needed to sell to produce a profit of $40,000 ?

Brandon Company 

 

 

 

 Brandon Company manufactures a single product. Each unit sells for $15. The firm's projected costs are listed below: 

 

 

 

 Variable costs per unit: 

 

 Production $5 

 

 SG&A $1 

 

 Fixed costs: 

 

 Production $40,000 

 

 SG&A $60,000 

 

 Estimated volume 20,000 units 

 

 

 

 

 

 45. Refer to Brandon Company. What is Brandon's projected margin of safety for the current year? Refer to Brandon Company. What is Brandon's projected degree of operating leverage for the current year? 

 Alpha, Beta, and Epsilon Companies 

 

 Below are income statements that apply to three companies: Alpha, Beta, and Epsilon: 

 

 

 

 Alpha Co. Beta Co. Epsilon Co. 

 

 Sales $100 $100 $100 

 

 Variable costs (10) (20) (30) 

 

 Contribution margin $ 90 $ 80 $ 70 

 

 Fixed costs (30) (20) (10) 

 

 Profit before taxes $ 60 $ 60 $ 60 

 Refer to Alpha, Beta, and Epsilon Companies. Within the relevant range, if sales go up by $1 for each firm, which firm will experience the greatest increase in profit?