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Homework answers / question archive / Molender Corporation is a distributor of a sun umbrella used at resort hotels

Molender Corporation is a distributor of a sun umbrella used at resort hotels

Accounting

Molender Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month, budget appear below: 

28 18 8.828 I dim 
Required: 1. WM1. is the cornpanys margin of safety? (Do not round intermediate calculations.) 2. WhM is the company, margin of safety as a pe centage of iM sales? (Round your percentage answer to 2 decimal placm (i.e. .1234 should be entered as:MUM 
 

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Contribution margin=Sales-Variable cost  

=$28 - $19 

= $9 per unit

 

Breakeven=Fixed expenses/Contribution margin

= $7,920/$9

= 880 units

 

Margin of safety=Total sales-Breakeven sales

= 1,030 - 880

= 150 units

= 150*$28 

= $4200

 

Margin of safety % = Margin of Safety in Units /Actual sales in Units 

= 150/1,030

= 14.56%

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