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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. 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
Expert Solution
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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