Question

Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,650.

Required:
1. Calculate the margin of safety in terms of the number of units.
2. Calculate the margin of safety in terms of sales revenue.


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  • CreatedSeptember 22, 2015
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