Ahmad Inc. is a toy manufacturing firm and has the following information: Activity levels Total costs Sales revenue 65 units $15 600 100 units $21 200 $19 500 $30 000 a.) Calculate the break-even point in units and dollar. Explain your answer. b.) If the firm has current sales units of 85 units, calculate the margin of safety in dollar and explain your answer. c.) The firm was approached by a customer, Wayne to produce toy car and is willing to pay Ahmad Inc. $100 per unit. Explain whether the order should be accepted. Justify your answer with supporting calculation.

Ahmad Inc. is a toy manufacturing firm and has the following information: Activity levels Total costs Sales revenue 65 units $15 600 100 units $21 200 $19 500 $30 000 a.) Calculate the break-even point in units and dollar. Explain your answer. b.) If the firm has current sales units of 85 units, calculate the margin of safety in dollar and explain your answer. c.) The firm was approached by a customer, Wayne to produce toy car and is willing to pay Ahmad Inc. $100 per unit. Explain whether the order should be accepted. Justify your answer with supporting calculation.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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