Check my work Information concerning a product produced by Ender Company appears

Question

Check my work Information concerning a product produced by Ender Company appears here Sales price per unit Variable cost per unit Total annual fixed 172 89 manufacturing and operating $581,000 costs Required Determine the following a. Contribution margin per unit. $ 83 margin unit b. Number of units that Ender must sell to break even Break-even in7,000 nits c. Sales level in units that Ender must reach to earn a profit of $157,700 Sales in nits d. Determine the margin of safety in units, sales dollars, and as a percentage. (Round "Percentage" answer to 1 decimal place (i.e., 0.234 should be entered as 23.4).) Units Sales Percentage Margin of safet

Explanation / Answer

a. Contribution Margin per unit = Sales - variable cost
= $172 - $89 = $83 per unit

b. Break even in units = Fixed costs / Contribution Margin per unit
= $581,000 / $83 = 7,000 units

c. Sales in units = (Fixed costs + profit) / Contribution Margin per unit
= ($581,000 + $157,700) / $83 = 8,900 units

d. Margin of safety = Total Sales units - Break even units = 8,900 - 7,000 = 1,900 units
  Margin of safety (in sales) = 1,900 units x $172 = $326,800
  Margin of safety (in %) = 1,900 / 8,900 = 21.3%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---