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Compute the margin of safety in dollars and as a ratio

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Reference no: EM131795068

Question 1 - For Dousmann Company actual sales are $1,200,000 and break-even sales are $840,000. Compute (a) the margin of safety in dollars and (b) the margin of safety ratio.

Question 2 - In the month of June, Angela's Beauty Salon gave 3,500 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,800 and variable costs were 80% of sales.

Instructions

(a) Determine the contribution margin in dollars, per unit, and as a ratio.

(b) Using the contribution margin technique, compute the break-even point in dollars and in units.

(c) Compute the margin of safety in dollars and as a ratio.

Reference no: EM131795068

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