What is the margin of safety in dollars and as a ratio
Course:- Accounting Basics
Reference No.:- EM132283995

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Question - Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016:

Sales 2,500 units

Sales price $40 per unit

Variable costs $24 per unit

Fixed costs $19,500

Instructions -

(a) What is the contribution margin ratio?

(b) What is the break-even point in dollars?

(c) What is the margin of safety in dollars and as a ratio?

(d) If the company wishes to increase its total dollar contribution margin by 30% in 2017, by how much will it need to increase its sales if all other factors remain constant?

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