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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