Question

# E6-10 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Margin of Safety [LO 6-2, 6-3] Last month,...

E6-10 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Margin of Safety [LO 6-2, 6-3]

Last month, Laredo Company sold 540 units for \$70 each. During the month, fixed costs were \$4,704 and variable costs were \$42 per unit.

Required:

1. Determine the unit contribution margin and contribution margin ratio.

2. Calculate the break-even point in units and sales dollars.

3. Compute Laredo’s margin of safety in units and as a percentage of sales.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

Determine the unit contribution margin and contribution margin ratio. (Round your Contribution Margin Ratio to the nearest whole percentage.)

 Unit Contribution Margin Contribution Margin Ratio %
• Required 2
• Required 3

Calculate the break-even point in units and sales dollars. (Round your answers to the nearest whole number.)

 Break-Even Units Units Break-Even Sales Dollars
• Required 3

Compute Laredo’s margin of safety in units and as a percentage of sales. (Round your intermediate calculations to the nearest whole number. Round your Percentage of Sales answer to 4 decimal places (i.e. 0.123456 should be entered as 12.3456%)).

 Margin of Safety Units Margin of Safety as Percentage of Sales %

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