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Sonita Manu: breakeven, target profit, margin of safety

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Sonita Manufacturing
per unit
Sales RM25.00
DM RM10.50
DL RM5.00
VOH RM3.00
variable selling RM1.30
total var cost RM19.80

Fixed costs (annual)
MOH RM192,000.00
S&A RM276,000.00
RM468,000.00

sales volume 120,000

Calculate breakeven in units and sales, margin of safety in units, units to reach target of 260,000 and units to breakeven if labor costs rise by 8%.

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Solution Summary

This solution contains a tutorial that shows the formulas, the computations and the approach for these questions. Click in cells to see computation in Excel.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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