Question

# Unit sales 20,000 units Selling price per unit \$60 per unit Variable expenses per unit \$45...

Unit sales 20,000 units

Selling price per unit \$60 per unit

Variable expenses per unit \$45 per unit

Fixed expenses \$240,000

CVP Relationships Compute the CM ratio

Selling price per unit Variable expenses per unit =

Contribution margin per unit =

CM ratio =

Compute the break-even

Break-even in unit sales=

Break-even in dollar sales=

Compute the margin of safety

Margin of safety in dollars=

Margin of safety percentage=

 Following are the inputs given: Sales(in units) 20,000 Slling price per unit \$60 Variable exp per unit \$45 Fixed Expenses \$240,000 Sales (In value)- 20000*60 \$1,200,000 Computation of: 1 CM Ratio Slling price per unit \$60 Variable exp per unit \$45 Contribution margin per unit \$15 CM Ratio (Contribution margin per unit/Selling Price per unit) 25% Variable expense ration 75% 2 Break even(BEP) In units (Fixed cost/contribution margin per unit) 16000 In Value Break even in units * selling price per unit \$960,000 3 Margin of safety(MOS) In value (sales value - Break even in value) \$240,000 In Percentage MOS in value/Sales value 20%

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