Question 1
Total S400,00 Sales Variable Expenses
Question 2
Sales Variable Expenses Contribution Margin Fixed ($330)
Question 3
Total Sales $350
Answer to question 1
24. Answer: Option D) $144,000
Contribution margin ratio = Contribution margin / Sales = $120000 / $400000 = 30%
Revised sales = $400000 + 20% = $480000
Revised contribution margin = $480000 x 30% = $144000
25. Answer: Option A) $234,000
Break-even point in dollar sales = Fixed expenses / Contribution margin ratio
Contribution margin ratio = Contribution margin / Sales = $84000 / $240000 = 35%
Break-even point in dollar sales = $81900 / 35% = $234000
26. Answer: Option B) $16,000
Margin of safety = Actual sales – Break-even sales
Break-even point in dollar sales = Fixed expenses / Contribution margin ratio
Contribution margin ratio = Contribution margin / Sales = $128000 / $320000 = 40%
Break-even point in dollar sales = $121600 / 40% = $304000
Margin of safety = $320000 – $304000 = $16000
Answer to question 2
| 1. Contribution margin ratio = Contribution margin / sales= 132,000/330,000 = 40%New sales = 330,000*140% = 462,000Total Contribution margin : 462,000 * 40%= 184,800 | |
| 2 Margin of Safety = sales – Breakeven sales= 13,900-10,425 = 3475Margin of Safety percentage = 3475 / 13,900= 25% |
Answer to question 3
