Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution margin. Its fixed costs are $200,000. Ice Company has current sales of $420,000 and a 30% contribution margin. Its fixed costs are $90,000. What is the margin of safety for Fire and Ice? Compare the margin of safety in dollars between the two companies. Which is stronger? Compare the margin of safety in percentage between the two companies. Now which one is stronger? Compute the degree of operating leverage for both companies. Which company will benefit most from a 10% increase in sales? Explain why. Illustrate your findings in an Income Statement that is increased by 10%

Q: XYZ company has sales of $260,000, a contribution margin ratio of 60%, and a target profit of…

A: Option e. $6.93 is correct  Given  Sales  = 260000 Contribution Ratio = 60% Profit =30000 Total Sale…

Q: If Canace Company, with a break-even point at $372,600 of sales, has actual sales of $460,000, what…

A: Margin of safety is part of cost volume profit analysis. It indicates the actors of actual sales…

Q: Spice Inc.'s unit selling price is $51, the unit variable costs are $38, fixed costs are $102,000,…

A: Formula: Contribution margin = Selling price - variable cost

Q: The contribution margin ratio is 30% for your company and the break even point in sales is $150,000.…

A: Formula: Break even point in sales = Fixed cost / contribution margin Division of fixed cost with…

Q: Each of two similar companies has sales of $20,000 and total costs of $15,000 for a month. Company…

A: Contribution Margin: It is defined as the difference between the sales and the variable cost. In…

Q: LBRL Asia manufactures three lines of heavy equipment for electrical, chemical, and food producers.…

A: We are in this question requires to calculate the sales, variable cost and total contribution margin…

Q: Jakarta Company is a service firm with current service revenue of $400,000 and a 40% contribution…

A: I am answering the first three sub-parts of the question as per bartleby guidelines. Please…

Q: One company sells a product at $ 40 and its variable costs are $ 30 per unit, while the company's…

A: Margin of safety refers to the amount of how much the output or sales level can fall before a…

Q: akarta Company is a service firm with current service revenue of $400,000 and a 30% contribution…

A: The margin of safety is calculated by deducting the break-even sales from the actual sales of the…

Q: A company needs to sell 15,000 units of its only product in order to break even. Fixed costs are…

A: Margin of safety = Total sales - Break even sales

Q: For a table manufacturing company, selling price for a table is $174.00 per Unit, Variable cost is…

A: Break-even analysis is a technique used widely by production management. It helps to determine the…

Q: Adidas Co., has a sale of $2,100,000 (7,000 units), fixed expenses are $504,000, and the…

A: Introduction: Margin of safety : Deduction of break even sales from Actual sales derives the Margin…

Q: Dave’s has total fixed costs of $45,000. If the company’s contribution margin is 50%, the income tax…

A: Units need to sell to produce to desired profit = (Fixed costs + Desired profit) / Contribution…

Q: Young Company budgets sales of $1,210,000, fixed costs of $68,100, and variable costsof $302,500.…

A: Contribution margin ratio (%)=Contribution marginBudgeted sales×100

Q: Posters.com is a small Internet retailer of high-quality posters. The company has $890,000 in…

A: Formula Return on Investment =Net Operating Income/ Average Operating assets    Sales   Net…

Q: The Hammer Company has the following cost structure: fixed costs of Birr 70,000 per month and…

A: Contribution per unit= Sales- variable cost per unit Profit= (Sales per unit- variable cost per…

Q: f sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, what is the…

A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…

Q: Tanner is CEO of Jones Aerospace. The firm manufactures titanium screws utilized on spacecraft. The…

A: Net operating income means the difference between the revenue and operating cost .   Break even…

Q: he contribution margin ratio is 25% for your company and the break-even point in sales revenue is…

A: Break even sales in dollars = Fixed expense / Contribution Margin Ratio Contribution margin =…

Q: Hello, I have the following question. D&R Corp. has annual revenues of $284,000, an average…

A: Computation of Selling Price of New Product

Q: TORT Company produced 40,000 units of product in 2020. Sales Revenue per unit was $20; variable cost…

A: The details are given of manufacturing company. Required  1. Contribution Margin Ratio  2. Operating…

Q: a. Young Company budgets sales of $1,120,000, fixed costs of $55,400, and variable costs of…

A: Contribution margin = sales - variable costs = $1120000-246400 = $873,600

Q: If Canace Company, with a break-even point at $522,600 of sales, has actual sales of $670,000, what…

A: Solution:-a Calculation of margin of safety in dollars and as a percentage of sales as follows…

Q: An engineering consulting firm measures its output in a standard service hour unit, which is a…

A: Give that, Variable cost = $62 per hour Selling price = $85.56 per hour Fixed cost = $2024000…

Q: A company has fixed costs of $270,000, a contributmargin per unit of $14, and a contribution margin…

A: The Break-even point is the point where the company is able to cover all its costs but does not make…

Q: If Canace Company, with a break-even point at $308,000 of sales, has actual sales of $440,000, what…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: a. If Go-Go Buggies Company, with a break-even point at $6,000,000 of sales, has actual sales of…

A: calculate the margin safety as follows:  Margin of Safety (dollars) = Actual Sales - Break Even…

Q: rtising, sales could be increased by 20%. What is the maximum increased advertising cost the company…

A: Advertising cost refers to the expenses that are involved in the promotional activities of the…

Q: Tanner is CEO of Jones Aerospace. The firm manufactures titanium screws utilized on spacecraft. The…

A: We can find out the break even by achieving target net income by following formulas :- Break even…

Q: Idaho Corp. has fixed costs of $20,000 and a contribution margin ratio of 50%. Currently, sales are…

A: Margin of Safety: The margin of safety is a notion in investing that states that investor should…

Q: If Canace Company, with a break-even point at $960,000 of sales, has actual sales of $1,200,000,…

A: Break even point shows the sales in units or amount at which the company will be in a position of no…

Q: McGrath electric is a service firm with current service sales of 4,794,549 and a 57% contribution…

A: Operating income = ( Sales * Contribution margin ratio ) - Fixed cost

Q: Company XYZ is currently operating with a 60% contribution margin. The company is planning an…

A: Contribution margin= Contribution/ Sales Contribution= Sales-Variable cost

Q: A cement manufacturer has supplied the following data: Tons of cement produced and sold $260,000…

A:

Q: Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of…

A: Break-even analysis is a technique used widely by production management. It helps to determine the…

Q: Peterson Inc. currently has a contribution margin of $30 on its product. Peterson Inc. is…

A: Sales - Variable Cost  =  Contribution Margin - Fixed Cost = Operating Income.

Q: Posters.com is a small Internet retailer of high-quality posters. The company has $740,000 in…

A: Net operating income is the income after deducting all expenses (variable and fixed). Return on…

Q: A responsibility center's contribution margin ratio is 40%, and its common fixed costs are currently…

A: Increase in margin = Increase in contribution margin - Increase in fixed costs where, Increase in…

Q: A company currently sells 400 units at a sales price of $300. Its contribution margin is 40%, and…

A: The calculation of Margin of safety is shown hereunder : Actual sales = $ 120,000 ( 400 units × $…

Q: a. If Del Rosario Company, with a break-even point at $1,160,000 of sales, has actual sales of…

A: a. 1. Margin of safety = Total actual sales - Break even sales = $1450000 - $1160000 = $290000 2.…

Q: A company believes that if it spends $30,000 on an advertising campaign for one of its segments,…

A: Increase in Net Operating Income = Increase in Contribution Margin - Increase in Fixed Expenses

Q: Colton Dry Cleaners has determined the following about its costs: Total variable expenses are…

A: Contribution Margin Ratio = Total Fixed Cost Break-Even Sales * 100   Variable Cost  Ratio = 100 -…

Q: Boise Corp had a margin of safety of $375,000 last month, with sales revenue of $1,020,000 and fixed…

A: Solution a: Breakeven sales = current sales - Margin of safety sales = $1,020,000 - $375,000 =…

Q: Imelda Company budgets sales of $810,000, fixed costs of $62,000, and variable costs of $275,400.…

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are…

A: Degree of operating leverage (DOL): DOL Reflects an organization's variable and fixed cost…

Q: D&R Corp. has annual revenues of $262,000, an average contribution margin ratio of 33%, and fixed…

A: Operating income is a measure that shows how much of a company's revenue is transformed into…

Q: a. Imelda Company budgets sales of $1,800,000, fixed costs of $394,000, and variable costs of…

A: Contribution margin ratio = (Total contribution/sales) ×100