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

Sales budget, Sales Budget It provides volume of sales and sales mix o...

Sales Budget It provides volume of sales and sales mix of the recent operations. The sales forecast is initially prepared and upon completion the sales budget is finalized. Th

What are the total units to be accounted for on the cost of, The Butchering...

The Butchering Department of the Santa Fe Meat Packing Corporation (a process costing corporation, FIFO costing) had 1,500 units, 1/3 completed at the beginning of the period and 1

Determine the current ratio, When firms enter into loan agreements with the...

When firms enter into loan agreements with their bank it is very common for the agreement to have a restriction on the minimum current ratio the firm has to maintain. So, it is imp

Development and research cost budget, Development and Research Cost Budget ...

Development and Research Cost Budget These are costs that are discretional in nature such as they are determined on need basis via the managers concerned. Research cost is the

Valuation of inventory or closing and issues stocks, Valuation of Inventory...

Valuation of Inventory or Closing and Issues Stocks Valuation of inventory aims on attaching a monetary value in the issued or stores for production. It is useful in producing

What profit is earned by each firm, Three oligopolists, A, B and C, produce...

Three oligopolists, A, B and C, produce an identical product, Q. Q is produced under conditions of constant costs, that is, AC = MC = $100. The market demand schedule for Q is:

Economic order quantity, Economic Order Quantity This constitutes the...

Economic Order Quantity This constitutes the quantity purchased of either raw materials or stocks which is considered most optimum. It is the quantity such minimizes both ord

Labor costing, What is labor costing,what are the problems involved in labo...

What is labor costing,what are the problems involved in labor costing

Compute the estimated value of inventory stolen at kji, The following are t...

The following are three independent situations where the reporting entity for which financial statements are being prepared are underlined. Every company has a December 31, 2012 ye

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