Ch_4b_Margin_of_Safety_Relationships

Ch_4b_Margin_of_Safety_Relationships - Total Per Unit Total...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
50,000 Actual Sales MOS X CMR = O.I. MOS X CMR = O.I. Contribution Margin O.I. Contribution Format (Actual) 46,000 Total Per Unit % Fixed Costs Sales $50,000 $50 100.00% Variable Costs 30,000 $30 60.00% 40,000 Contribution Margin $20,000 $20 40.00% Fixed Cost 16,000 Operating Income $4,000 30,000 Total Variable Costs Contribution Format ( @ Breakeven) Total Per Unit % 24,000 Sales $40,000 $50 100.00% Variable Costs 24,000 $30 60.00% Contribution Margin $16,000 $20 40.00% Fixed Cost 16,000 Operating Income $- Margin of Safety $10,000 Margin of Safety % 20.00% Degree of Operating Leverage 5 0 Margin of Safety M.O.S X V.C. Ratio BE Sales X C.M. Ratio = Fixed Cost Breakeven Sales BE Sales X C.M. Ratio = Fixed Cost M.O.S X V.C. Ratio BE Sales X V.C. Ratio BE Sales X V.C. Ratio
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Assignment Solution Actual Sales = $50,000 C.M. Ratio = 40.0% Fixed Costs = $16,000 Units = 1,000 Contribution Format (Actual) Contribution Format ( @ Breakeven)
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Total Per Unit % Total Per Unit % Sales $50,000 $50 100.00% Sales $40,000 $50 100.00% Variable Costs 30,000 $30 60.00% Variable Costs 24,000 $30 60.00% Contribution Margin $20,000 $20 40.00% Contribution Margin $16,000 $20 40.00% Fixed Cost 16,000 Fixed Cost 16,000 Operating Income $4,000 Operating Income $- Breakeven in Units: 800 Margin of Safety: $10,000 Margin of Safety %: 20.00% Degree of Operating Leverage 5 Assignment Solution Actual Sales = $50,000 C.M. Ratio = 40.0% Fixed Costs = $16,000 Units = 1,000 Contribution Format (Actual) Contribution Format ( @ Breakeven) Total Per Unit % Total Per Unit % Sales Sales Variable Costs Variable Costs Contribution Margin Contribution Margin Fixed Cost Fixed Cost Operating Income Operating Income Breakeven in Units: Margin of Safety: Margin of Safety %: Degree of Operating Leverage...
View Full Document

This note was uploaded on 10/20/2011 for the course ACC 222 taught by Professor Brewer during the Spring '08 term at Miami University.

Page1 / 3

Ch_4b_Margin_of_Safety_Relationships - Total Per Unit Total...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online