Calculate company margin of safety

Assignment Help Finance Basics
Reference no: EM1363082

Small Fries is a company that processes gourmet potatoes into little french fries. Each package has a contribution margin of $2.50. Small Fries have total fixed costs of $40,000 each period. The selling price of one package is $5. Sales for the most recent period totaled $90,000.

a. What is the company's breakeven point in units? In dollars?
b. What was the company's margin of safety for the most recent period?
c. What does the margin of safety represent?

 

Reference no: EM1363082

Questions Cloud

Break-even analysis and leverage : Highland Cable Corporation is planning an expansion of its facilities. Its current income statement is as follows:
Human nutrition and food guide pyramid : How do we organize food choices? How do the serving sizes in the Food Guide Pyramid fit with our experiences in daily food choices? What influences the food we pick and why?
Canada food guide to healthy eating : What are the differences between Canada's Food Guide to Healthy Eating and the Dietary Reference Intakes (DRIs)?
Explain which of these documents would not qualify research : Explain Which of these documents would not qualify as primary research?
Calculate company margin of safety : Small Fries is a Corporation that processes gourmet potatoes into little french fries. Each package has a contribution margin of $2.50. Small Fries have total fixed costs of $40,000 each period.
Health problems of an underserved population : If you were in charge of reducing the health problems of an underserved population, what would be your initial actions? What would be your first three priorities? Ideas are offered.
How long does the block remain in contact : how long does the block remain in contact.
Economic and legal differences in holders of common stock : Discuss and explain the economic and legal differences between holders of common stock, preferred stock and general creditors.
Explain what other factors might influence the change : Explain What other factors might influence the change of the structure of an organization?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd