Calculate company margin of safety

Assignment Help Finance Basics

Reference no: EM1361442

Van Roekel Company sells a single product. The product has a selling price of $100 per unit and variable expenses of 80% of sales. If the company's fixed expenses total $150,000 per year, what will the break even point be? My answer must be given in dollars and units.

Truesdale Company sells hand crafted furniture. One item it sells is a foot stool which sells for $30 per unit. The variable cost related to the stool, including product and shipping costs, are $18 per unit. Total fixed cost for the company are $60,000. Assuming the stools are the only product the company sells this year, draw a CVP graph to represent the company's sales and expenses. From this graph, compute the approximate breakeven point in dollars and units.

The following is Charles Corporation's contribution format income statement for last month.

Sales - 4,000,000
Less variable expenses - 2,800,000
Contribution margin - 1,200,000
Less fixed expenses - 720,000

Net Income - 480,000

The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month.

Part (a) What is the company's breakeven in sales dollars?
Part (b) How many units would the company have to sell to attain target profits of $600,000?
Part (c) What is the company's margin of safety
Part (d) What is the company's degree of operating leverage?

Reference no: EM1361442

Questions Cloud

The costs of maintaining current assets : The costs of maintaining current assets, including the opportunity cost of capital is known as, Expenses should be recorded in the period in which they are used up.

Program to calculate area of two-dimensional shape : Implement the Shape hierarchy shown in following figure. Each TwoDimensionalShape should contain method getArea to calculate the area of the two-dimensional shape.

Explain how does the price of fertilizer compare : Explain how does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer.

Find the acceleration of the bucket : suppose that the springs have somehow not yet compressed to their maximum amount. How much are the springs compressed.

Calculate company margin of safety : Van Roekel Corporation sells a single product. The product has a selling price of $100 each unit and variable expenses of 80 percent of sales. If the company's fixed expenses total $150,000 each year,

Disease prevention strategies : Should healthcare organizations develop disease prevention strategies? Why or why not? Do you think ethically it is their responsibility?

There exists finite set of coin types-coin-changing problem : Show that if an ≠ 1, then there exists a finite set of coin types and a C for which there is no solution to the coin-changing problem. Show that there is always a solution when an = 1.

Illustrate what would be the size of the us labor force : Suppose that the U.S. noninstituional adult population is 230 million and the labor force participation rate is 67 percent. Illustrate what would be the size of the U.S. labor force.

Solving finance related problems : In a statement of cash flow, the term cash includes, The ownership of common stock in a corporation usually carries the following rights:

User Account

All Pages