Calculate the break-even point and safety margin, Managerial Accounting

The Braggs & Struttin' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of 40,000 units.

Sales                                       $1,600,000.

Less: COGS                                1,120,000.

Gross margin:                              $480,000.

Less: Operating expenses              100,000.

Income:                                      $380,000.

Cost of goods sold consists of $810,000 of variable costs and $310,000 of fixed costs. Operating expenses consists of $30,000 of variable costs and $70,000 of fixed costs.

Required:

A. Calculate the break-even point in units and sales dollars.

B. Calculate the safety margin (in dollars).

C. Braggs & Struttin' received an order for 6,000 units at a price of $25.00. There will be no increase in fixed costs, but variable costs will be reduced by $0.54 per unit because of cheaper packaging. Determine the projected increase or decrease in profit from the order, assuming there is no opportunity costs.          

Posted Date: 2/16/2013 12:20:31 AM | Location : United States







Related Discussions:- Calculate the break-even point and safety margin, Assignment Help, Ask Question on Calculate the break-even point and safety margin, Get Answer, Expert's Help, Calculate the break-even point and safety margin Discussions

Write discussion on Calculate the break-even point and safety margin
Your posts are moderated
Related Questions
tha accountant''s approach to CVP ANALYSIS HAS BEEN CRITICISED IN THATIT DOES NOT DEAL WITH THE FOLLOWING; CHANGES IN PRODUCT MIX. WHY IS IT SO?

State Factors determining Working Capital requirement.

Disadvantages of activity based costing 1) It is essentially not the panacea for all ills. 2) It absorbs a lot of resources. 3) Too much emphasis on customer viability c

A few of the main focus areas of treasury operations are as follows: 1) Cash Flow-Receipts and Disbursements: Accelerating the collection of cash receipts and mobilization or

Define Activities based costing by horngren According to horngren " ABC is a system that focuses on activities as fundamental cost object and utilizes cost of these activi

The president expects sales to increase by 12% next year. By how much should net operating income increase? Sales $2,000,000 Variable expenses 1,000

depreciation,depletion and amortisation

Two-person, zero-sum games Two players X & Y have two alternatives. They show their choices by pressing two types of buttons in front of them but they cannot see the opponents

Right now you are 20 years old and you have decided that you want to have $2,000,000 in the bank when you turn 65 years old. How much must you deposit each year to reach your goal

Explain the main purpose of cost centre The main purpose of cost centre is two fields. 1. Recovery of cost: costs are collected, classified into two field in respect of