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How do calculate the safety margin

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A business is selling jeans trousers for 93 EUR a piece. The production has three stages. Firstly cutting and secondly sewing. The fixed cost of stages one is 231 thousand EUR and fixed the cost of stage two is 452 thousand EUR. The third stage is washing. The washing activity is outsourced to an other company so it becomes a variable cost. For the washing of 1 jeans we have to pay this company 50 EUR. We estimate we will sell 30,000 pieces.

Problem 1: Calculate the safety margin (%).

Reference no: EM132972205

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