Windows is a small company that installs windows. Its cost structure is as follows:LOADING...(Clickthe icon to view the cost structure.) TraylorWindows' breakeven revenues is$1,870,000and breakeven units is3,400. Calculate the margin of safety in units and dollars and the margin of safety percentage ifTraylorWindows expects to sell3,600windows in the year. Begin with calculating the margin of safety in dollars. Determine the formula to calculate the margin of safety in dollars. Then, enter the amounts and calculate the margin of safety in dollars. Budgeted revenue-Breakeven revenue=Margin of safety in dollars - = Next, determine the formula, enter the amounts, and calculate the margin of safety in units. Budgeted units-Breakeven units=Margin of safety in units - = Finally, calculate the margin of safety percentage ifTraylorWindows expects to sell3,600windows in the year. Select the formula labels, then enter the amounts and calculate the margin of safety percentage. (Round your final percentage to one decimal place, X.X%.) ÷ =Margin of safety percentage ÷ = % Choose from any list or enter any number in

Answered: Traylor Windows' breakeven revenues is…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6CE

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Windows is a small company that installs windows. Its cost structure is as follows:

(Click

the icon to view the cost structure.)

Traylor

Windows' breakeven revenues is

$1,870,000

and breakeven units is

3,400.

Calculate the margin of safety in units and dollars and the margin of safety percentage if

Traylor

Windows expects to sell

3,600

windows in the year.

Begin with calculating the margin of safety in dollars.

Determine the formula to calculate the margin of safety in dollars. Then, enter the amounts and calculate the margin of safety in dollars.

	Budgeted revenue	-	Breakeven revenue	=	Margin of safety in dollars
		-		=

Next, determine the formula, enter the amounts, and calculate the margin of safety in units.

	Budgeted units	-	Breakeven units	=	Margin of safety in units
		-		=

Finally, calculate the margin of safety percentage if

Traylor

Windows expects to sell

3,600

windows in the year.

Select the formula labels, then enter the amounts and calculate the margin of safety percentage. (Round your final percentage to one decimal place, X.X%.)

	÷		=	Margin of safety percentage
	÷		=		%

Choose from any list or enter any number in

Expert Solution

Step 1 Introduction

Margin of safety is the excess of revenue earned by company compared to break even revenue.

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