Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost
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Question:
Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $279,984 per year. Administrative cost (all fixed) totals $224,352. Comer expects to sell 216,800 strings of light next year.
Required: 1. Calculate the break-even point in units.
2. Calculate the margin of safety in units.
3. Calculate the margin of safety in dollars.
4. Conceptual Connection: Suppose Comer actually experiences a price decrease next year while all other costs and the number of units sold remain the same. Would this increase or decrease the risk for the company?
Related Book For
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
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