Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Explore thousands of questions and answers from knowledgeable experts in various fields on our Q&A platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.
Sagot :
Answer:
1. Break even points = 400 units
margin of safety = $100
Explanation:
Given data:
budget revenue in 2017 = $1,500,000
Fixed cost =$400,000
total marketing plan = 500
take contribution margin/unit = Revenue - variable cost
= 3000 - 2000
contribution margin/unit = $1000
take break even sales $400
break even point
Break even point
margin of safety is calculated as
margin of safety = total quantity to be sold - break even sales
= 500 - 400 = $100
2. A.
(1)
Break even in marketing plan = 400
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 400 × 3,000
= 1,200,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 1,200,000
= 300,000
= 20%
B.
(1) Contribution margin per marketing plan = Sales - Variable cost
= $4,000 - $2,000
= $2,000
Break even in marketing plan = 200
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 200 × 4,000
= 800,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 800,000
= 700,000
= 47%
Therefore, option (a) would achieve the margin of safety ratio more than 45%.
Step-by-step explanation:
Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.
