BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
Chapter 16, Problem 28E
Textbook Problem
11 views

Junior Company has a breakeven point of 34,600 units and is selling 35,000 units. If unit variable costs increase, the margin of safety will

  1. a. increase
  2. b. decrease
  3. c. remain the same
  4. d. it is impossible to tell

To determine

Identify the impact of increase in variable cost on margin of safety.

Explanation of Solution

Margin of Safety: The break-even point projects the level of sales volume where there is no profit or loss incurred. Similarly, the volume of sales over and above this point is known as margin of safety.

The increase in variable cost tends to increase the price of the product, which eventually the contribution margin increases and as a result the margin of safety decrease.

Hence, the increase of variable cost reduces the margin of safety...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 16 Solutions

Cornerstones of Cost Management (Cornerstones Series)
Show all chapter solutions
add
Ch. 16 - Why might a multiple-product firm choose to...Ch. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Why does the activity-based costing approach to...Ch. 16 - Super-Tees Company plans to sell 12,000 T-shirts...Ch. 16 - Jay-Zee Company makes an in-car navigation system....Ch. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Dupli-Pro Copy Shop provides photocopying service....Ch. 16 - Ringsmith Company is considering two different...Ch. 16 - Zebra Company manufactures custom-designed skins...Ch. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Reagan, Inc., has developed a chew-proof dog...Ch. 16 - Jonah Graham owns and operates The Green Thumb...Ch. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Head-Gear Company produces helmets for bicycle...Ch. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Nail Glow, Inc., produces novelty nail polishes....Ch. 16 - Income statements for two different companies in...Ch. 16 - Steinberg Company produces commercial printers....Ch. 16 - X-Cee-Ski Company recently expanded its...Ch. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Jester Company had unit contribution margin on...Ch. 16 - Loessing Company produced and sold 12,000 units...Ch. 16 - Junior Company has a breakeven point of 34,600...Ch. 16 - Bialy Company had the following information: What...Ch. 16 - If a companys variable cost per unit increases,...Ch. 16 - Don Masters and two of his colleagues are...Ch. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Salamanca produces and sells refrigerator magnets...Ch. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Mahan Consulting is a service organization that...Ch. 16 - Ironjay, Inc., produces two types of...Ch. 16 - Drake Company produces a single product. Last...Ch. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
PRESENT AND FUTURE VALUES FOR DIFFERENT PERIOOS Find the following values using the equations and then a financ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Calculate breakeven point.

Contemporary Marketing

Describe how banks create money.

Principles of Macroeconomics (MindTap Course List)

What is an entity?

Accounting Information Systems

Why do economists make assumptions?

Principles of Microeconomics (MindTap Course List)

What is meant by catering theory, and how might it impact a firm's dividend policy?

Fundamentals of Financial Management (MindTap Course List)

Does the current Social Security system promote income equality? Why or why not?

Macroeconomics: Private and Public Choice (MindTap Course List)