d) After completing Exercise 4, what is the Margin of Safety as a % of sales? Show answer as a %. See circle.

f) After completing Exercise 6, what is the Breakeven in Total Units? See circle.

EXERCISE 4: RGF Manufacturing makes a product that currently sells for $20 each. The Variable Costs are $12 per unit. Fixed Costs total $800,000 per year. How many units must be sold to break even? Fixed Costs UCM = Breakeven in Units = units What will the company's sales revenue be at the breakeven point? Breakeven Units x Unit Sales Price = Breakeven in Dollars units $ = NOTE: This could've also been calculated as: Fixed Costs / Contrib Margin Ratio Assume that the company's current sales are $2.6 million (130,000 units) per year. Calculate the company's Margin of Safety: Page 3 of 6 1) In Units 2) In Dollars 3) As a % of Total Sales % EXERCISE 6: Mark Wilson is considering renting a vending booth at a local mall for the holiday season. Mark intends to sell 3 products: candy, nuts and cookies. The Fixed Cost to rent the booth for the entire season is $27,900. Mark also anticipates the products to sell in a ratio of 5 candy, 3 nuts and 2 cookies (5:3:2), known as the sales mix. Calculate the total number of products that Mark needs to sell to break even. Step 1 of 3: Calculate a weighted average unit contribution margin: Total Candy $2.50 ($1.00) Nuts $3.00 Cookies $3.00 ($1.00) ($2.00) $ $ $ Sale price per unit Less: Variable cost per unit Contribution margin per unit Sales mix in units (ratio) Contribution Margin Weighted Avg CM per Unit X 5 3 X 2 = 10 $ $ $ = $ $ / 10 = $ Step 2 of 3: Utilize the weighted average contribution margin to calculate the Breakeven point in units: Fixed Costs / Weighted Avg UCM = Breakeven in Units $ $ =