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Unformatted text preview: Problem Part 1 Margin of safety = Total Budgeted (or actual) sales – Break-even sales Margin of safety = $50,000 - $35,000 Margin of safety = $15,000 Margin of safety percentage = Margin of safety in dollars/ Total budgeted (or actual) sales dollars Margin of safety percentage = $15,000/$50,000 Margin of safety percentage = 30% Solution Conrad Cookware has two factories. One is located in Peoria, Illinois and the other in Rockford, Illinois. Both factories are operating at a profit at the moment but the company wants to determine which factory is more vulnerable to the current economic downturn. The data for both factories are: Problem Part 2 Solution...
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- Spring '11
- Managerial Accounting, The Higher, Factory, Conrad Cookware, Break-even sales Margin