QUIZ I_Before Mid Term Exam_21 Oct 2015_Marketing3A_BATCH 2

Mercantile corporation has sales of 2000000 variable

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15. Mercantile Corporation has sales of $2,000,000, variable costs of $800,000, and fixed costs of $900,000. Mercantile ’s margin of safety ratio is Contribution Margin (CM) = $2,000,000 $800,000 = $1,200,000 CM Ratio = (Contribution Margin : Sales) x 100% = ($1,200,000 : $2,000,000) x 100% = 60% BEP Sales in $ = Total Fixed Cost : CM Ratio = $900,000 : 60% = $1,500,000 Margin of Safety = Actual or Expected Sales BEP Sales = $2,000,000 - $1,500,000 = $500,000 Margin of Safety Ratio = (Margin of Safety : Actual or Expected Sales) x 100% Margin of Safety Ratio = ($500,000 : $2,000,000) x 100% = 25% # DO YOUR BEST AND GOOD LUCK FOR THE EXAM #
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Name : …………………………………………… Student ID Number : …………………………………………… Class : …………………………………………… 5
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