Ef 419. Zaza (Pty) Ltd has sales of 1 500 units. The selling price and variable cost per unit are R52,50 and R22,50 respectively.Fixed costs are R13 500.What is the margin of safety ratio?a. 60%b. 77%c. 70%d. 75%

Margin of safety shows that how much is sales above the breakeven sales and how much is the sales…

Answered: Zaza (Pty) Ltd has sales of 1 500…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per unit? A. $30 B. $50 C. $80 D. $110
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit? A. $40 B. $60 C. $90 D. $150
A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio? A.10% B.40% C. 60% D. 90%
A product has a sales price of $250 and a per-unit contribution margin of $75. What is the contribution margin ratio?
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Beaucheau Farms sells three products (E, F, and G) with a sale mix ratio of 3:1:2. Unit sales price are shown. What is the sales price per composite unit? A. $28.00 B. $20.00 C. $59.00 D. $41.00
Lara Sdn. Bhd. has a variable cost ratio of 0.56. The fixed cost is RM103,840 and23,600 units are sold at break-even. Estimate the selling price, variable cost per unit andcontribution margin per unit.

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Zaza (Pty) Ltd has sales of 1 500 units. The selling price and variable cost per unit are R52,50 and R22,50 respe Fixed costs are R13 500. What is the margin of safety ratio? 1. 60% p. 77% . 70% H. 75%