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    Managerial Accounting Problem

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    7. The following information relates to Snowbird Corporation:

    What is Snowbird's margin of safety?
    A) $62,500
    B) $187,500
    C) $100,000
    D) $212,500

    8. Carver Company produces a product which sells for $40. Variable manufacturing costs are $18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 15% of the selling price is paid on each unit sold. The contribution margin per unit is:
    A) $7
    B) $17
    C) $22
    D) $16

    9. Winger Corp. sells a product for $5 per unit. The fixed expenses are $210,000 and the unit variable expenses are 60% of the selling price. What sales would be necessary in order for Winger Corp. to realize a profit of 10% of sales?
    A) $700,000
    B) $525,000
    C) $472,500
    D) $420,000

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    https://brainmass.com/business/accounting/managerial-accounting-problem-94334

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    7. The following information relates to Snowbird Corporation:

    What is Snowbird's margin of safety?
    A) $62,500
    B) $187,500
    C) $100,000
    D) $212,500

    Margin of safety = actual or budgeted sales - breakeven sales
    = $500,000 - $312,500
    = $187,500

    The variable price per unit = ($312,500 - $250,000)/2,000 = $31.25 or 20% of sales

    Actual sales = Net operating income + Total fixed expenses + Total variable expenses
    X = 150,000 + ...

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