Calculate the margin of safety in units

Assignment Help Financial Accounting

Reference no: EM13940093

MARGIN OF SAFETY

Chase Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $6.28 per string. The variable costs per string are as follows:

Direct materials	$1.27
Direct labor	1.58
Variable overhead	0.63
Variable selling	0.17

Fixed manufacturing costs total $231,650 per year. Administrative costs (all fixed) total $315,390. Chase expects to sell 380,000 strings of light next year.

Required:

1. Calculate the break-even point in units.

2. Calculate the margin of safety in units.

3. Calculate the margin of safety in dollars.

Reference no: EM13940093

Questions Cloud

Project from a shareholder wealth maximizing perspective : Assume NEWC has an investment opportunity (similar to the air bag opportunity in Other People's Money).The firm can spend $325 Million on refurbishing its wire and cable plant to develop a product that will be sold in packets or units of twenty. How ..

Servant leadership begins with the natural feeling : Servant leadership is a popular and unique leadership behavior that has proven to be effective for many leaders and followers. Robert Greenleaf (1970) first presented the term "servant leadership" in a 1970 essay, entitled "The Servant Leader" where ..

Average cost of capital using new common stock : What is the weighted average cost of capital using retained earnings? What is the weighted average cost of capital using new common stock?

An absolute cell reference : An absolute cell reference causes a potential error. indicates a cell's specific location and the reference does not change when you copy the formula. occurs when a formula directly or indirectly refers to the cell containin..

Calculate the margin of safety in units : Fixed manufacturing costs total $231,650 per year. Calculate the break-even point in units. Calculate the margin of safety in units. Calculate the margin of safety in dollars.

What is rezlers variable cost ratio : What is Rezler's variable cost ratio? What is its contribution margin ratio? Suppose Rezler's actual revenues are $30,000 more than budgeted. By how much will operating income increase?

Analyze the commission conundrum : Use that frame to analyze the "Commission Conundrum". And please write down the process in detail. For example, if your decision break a law, please write down what law does it break.

What is the weighted average cost of capital : What is the weighted average cost of capital using retained earnings? What is the weighted average cost of capital using new common stock?

Why do we need to incarcerate so many individuals : We have the highest incarceration rate of any industrialized nation and yet the public's perception is that the Criminal Justice System in the US is "too soft on crime". Why do we need to incarcerate so many individuals? Why is the public's percept..

User Account

All Pages