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BEP & Margin of Safety Problems

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Modern home appliances company places before you the following trading results:

Year Sales Net Income
2008 $50,000 $5,000
2009 $60000 $9000

Calculate the following:

(a) Contribution margin ratio,
(b) Fixed cost,
(c) Variable cost during two years,
(d) Break even point in dollars, and
(e) Margin of safety for 2008 and 2009.

(Ignore tax)

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Solution Summary

BEP and Margin of safety problems are examined.

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