Margin of safety, Cost Accounting

Assignment Help:

Margin of safety

Measures the sensitivity of budgeted sales volume compared with break-even sales volume. The difference between level of sales activity achieved and level of sales activity required to break-even in absolute or percentage terms.

Margin of safety (units)= Budgeted sales volume less Break-even sales volume

Margin of safety (%)= (Budgeted sales less Break-even sales volume/ Budgeted sales volume) x 100 Number of units sold to achieve a target profit= (Fixed cost + Target profit)/Contribution per unit


Related Discussions:- Margin of safety

What is the division''s margin, Eckels Wares is a division of a major corpo...

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Sales

Determine the internal rate of return, AOL is considering two proposals to ...

AOL is considering two proposals to overhaul its network infrastructure. They have received two bids. The first bid, from Huawei, will require a $20 million upfront investment and

Direct labour budget, Direct Labour Budget It represents the forecasts...

Direct Labour Budget It represents the forecasts of indirect and direct labour requirements to meet the demands of the company throughout the budget period. Therefore the budg

Overhead analysis, what do i need to know before the overhead preparation?

what do i need to know before the overhead preparation?

British Columbia Lumber has a Raw Lumber Division, British Columbia Lumber ...

British Columbia Lumber has a Raw Lumber Division and a Finished Lumber Division. The  variable costs are: 1.Raw Lumber Division: Rs. 100 per 100 board-feet of raw lumber 2.F

Prepare the material cost budget of products of a company, Prepare the Mate...

Prepare the Material Cost Budget of products of a Company For a company along with many products, a periodic budget would be developed given as: Assume a firm has 3 products X

.inventory, what are thereasons for holding inventories

what are thereasons for holding inventories

Calculate the cost of direct material used during the period, A company add...

A company adds overhead costs to jobs at the rate of $8 per direct labor hour. It accumulates overhead costs in a seperate manufacturing overhead account and uses normal costing to

Implementation of re-apportionment of overheads, Implementation of Re-Appor...

Implementation of Re-Apportionment of Overheads The re-apportionment of service department costs may be implemented in a number of methods. The Two extremes are as a) Wh

Calculate direct materials used, Advertising expense $17,200 Wages expense-...

Advertising expense $17,200 Wages expense-assemblers 36,840 Depreciation expense-machines 21,480 Utilities expense-factory 21,120 Wages expense-lathe operators 23,480 Repair expens

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