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 | $ | 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
(i.e. .1234 should be entered as 12.34).)**

Answer #1

**Answer:**

**1.)**

Margin of safety = Current sales - Break even sales

Current sales = 1040 units * $25

= $26000

Break even point in units = Fixed cost / contribution margin per unit

Contribution margin per unit = Selling price - variable expenses

= $25 - $12

= $13

Break even point in units = $11570/ $13

= 890 units

Break even point in sales dollar = 890 units * $25

= $22250

Margin of safety = $26000- $22250

= $3750

**2.)**

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $25 - $12

= $13

Break-even units = Fixed expense / Contribution margin per unit

= $11570/ $13 = 890

Margin of safety = Sales - Break even sales

= 1040 - 890

= 150

Margin of safety as a percentage of sales = Maragin of safety / Sales * 100

= 150 / 1040 * 100

= 14.42%

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
$
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
$
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
$
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
$
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...

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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