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

Assignment Help:

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.          


Related Discussions:- Calculate the break-even point and safety margin

Illustrate the steps involved in ratio analysis, Steps involved in ratio an...

Steps involved in ratio analysis The following are the four steps involved in the ratio analysis: 1) selection of relevant data from the financial statement depending upon t

Questions., how long will it take to get answers after question are submitt...

how long will it take to get answers after question are submitted

Homework.., given the above data what would the breakeven in units and doll...

given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _

What are the disadvantages of zero base budgeting, Disadvantages of zero ba...

Disadvantages of zero base budgeting 1) It is not suitable for all the activities in an organization 2) It has limited application in a profit making organization. In this c

What is activity based management, ABM(Activity based management): ABM ...

ABM(Activity based management): ABM system is primary source of information for AM as a part of ABM identify value added and non-value added activity and management are also to

Accounting information system, I have 20pages preparing a system flowchart ...

I have 20pages preparing a system flowchart assignment

The basic eoq model-the deterministic models, THE BASIC EOQ MODEL This ...

THE BASIC EOQ MODEL This is the most simple of all the models discussed. In addition to the general assumptions which relate to all deterministic models (i.e. certainty of all

Write Your Message!

Captcha
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