Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level: Fixed administrative cost per unit R90.00 Total fixed manufacturing overhead R120 000 Total fixed marketing cost R50 000 Direct material usage per product 2 kg Direct material price per kilogram R14.50 Total direct labour cost R47 500 Required: (f) What is the margin of safety ratio?
Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level: Fixed administrative cost per unit R90.00 Total fixed manufacturing overhead R120 000 Total fixed marketing cost R50 000 Direct material usage per product 2 kg Direct material price per kilogram R14.50 Total direct labour cost R47 500 Required: (f) What is the margin of safety ratio?
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter21: Variable Costing For Management
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- Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level:
Fixed administrative cost per unit R90.00
Total fixed manufacturing
Total fixed marketing cost R50 000
Direct material usage per product 2 kg
Direct material price per kilogram R14.50
Total direct labour cost R47 500
Required:
(f) What is the margin of safety ratio?
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