Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $42 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $32. The monthly fixed cost for Casey’s Cases is $3,250.   Required: How many cases must Casey sell every month to break even? Casey believes that he can sell 385 cases a month. What is the margin of safety in terms of the number of cases?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
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Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...
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Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $42 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $32. The monthly fixed cost for Casey’s Cases is $3,250.

 

Required:

  1. How many cases must Casey sell every month to break even?
  2. Casey believes that he can sell 385 cases a month. What is the margin of safety in terms of the number of cases?
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