Question

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below:

Selling price per unit | $ | 23 |

Variable expense per unit | $ | 15 |

Fixed expense per month | $ | 6,800 |

Unit sales per month | 1,000 | |

**Required:**

1. What is the company’s margin of safety? **(Do not round
intermediate calculations.)**

2. What is the company’s margin of safety as a percentage of its
sales? **(Round your percentage answer to 2 decimal places
(i.e. .1234 should be entered as 12.34).)**

Answer #1

1. **Margin of
safety**

Margin of safety (dollars) = Profit / Contribution margin ratio

Contribution margin ratio = Contribution margin per unit / Selling price per unit

= 8 / 23 = 34.78%

Margin of safety (dollars) = $1,200 / 34.78%

=**$3,450**

**2.** Margin of safety ratio (%) = (Margin of
safety / Actual sales) *100

= (3,450/ 23,000) * 100

= **15.00%**

**Explanation**

Calculation of Profit | |

$ | |

Sales (23*1,000) | 23,000.00 |

Less: Variable cost (15*1,000) | 15,000.00 |

Contribution Margin | 8,000.00 |

Less: Fixed cost | 6,800.00 |

Profit | 1,200.00 |

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
25
Variable expense per unit
$
12
Fixed expense per month
$
11,570
Unit sales per month
1,040
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
26
Variable expense per unit
$
18
Fixed expense per month
$
6,960
Unit sales per month
1,020
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
24
Variable expense per unit
$
12
Fixed expense per month
$
9,600
Unit sales per month
950
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below: Selling price per unit $ 27 Variable expense per unit $ 17
Fixed expense per month $ 8,900 Unit sales per month 1,040
Required: 1. What is the company’s margin of safety? (Do not round
intermediate calculations.) 2. What is the company’s margin of
safety as a percentage of its sales? (Round your percentage answer
to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
25
Variable expense per unit
$
19
Fixed expense per month
$
4,860
Unit sales per month
960
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
24
Variable expense per unit
$
18
Fixed expense per month
$
5,340
Unit sales per month
1,040
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price per unit
$
27
Variable expense per unit
$
13
Fixed expense per month
$
11,480
Unit sales per month
970
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below:
Selling price
$29
per unit
Variable expenses
$13
per unit
Fixed expenses
$13,120
per month
Unit sales
970
units per month
Required:
1.
Compute the company’s margin of safety.
2.
Compute the company’s margin of safety as a percentage of its
sales. Round your percentage answer to 2 decimal places
(i.e .1234 should be entered as 12.34)....

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below: Selling price per unit $ 25 Variable expense per unit $ 15
Fixed expense per month $ 8,600 Unit sales per month 1,010
Required:
1. What is the company’s margin of safety? (Do not round
intermediate calculations.)
2. What is the company’s margin of safety as a percentage of its
sales? (Round your percentage answer to 2 decimal places...

Molander Corporation is a distributor of a sun umbrella used at
resort hotels. Data concerning the next month’s budget appear
below: Selling price per unit $ 26 Variable expense per unit $ 18
Fixed expense per month $ 6,960 Unit sales per month 1,020
Required: 1. What is the company’s margin of safety? (Do not round
intermediate calculations.) 2. What is the company’s margin of
safety as a percentage of its sales? (Round your percentage answer
to 2 decimal places...

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