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What is the company margin of safety

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Reference no: EM132988155

Question -

A) Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense is $54 per unit. The company's monthly fixed expense is $40,280.

Required -

1. Calculate the unit sales needed to attain a target profit of $6,700.

2. Calculate the dollar sales needed to attain a target profit of $9,100.

B) Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below:

Selling price per unit $ 27 Variable expense per unit $ 18 Fixed expense per month $ 8,010 Unit sales per month 1,040

Required -

1. What is the company's margin of safety?

2. What is the company's margin of safety as a percentage of its sales?

Reference no: EM132988155

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