Margin of Safety Ratio

Related BrainMass Solutions

• Dousmann Company: Compute margin of safety in dollars; margin of safety ratio

  Compute the following (a) the margin of safety in dollars and (b) the margin of safety ratio.

• Contribution margin, break-even and margin of safety

  Compute the margin of safety in dollars and as a ratio Margin of safety Margin of safety is the excess of current sales over breakeven sales.

• Contribution Margin & Margin of Safety

  Contribution margin ratio, Break-even point in dollars, Break-even point in units, Margin of safety in dollars, Margin of safety ratio.

• Contribution Margin and Breakeven Point

  Margin of Safety = Current Sales - Breakeven Sales Current Sales = 200,000X50=10,000,000 Margin of Safety = 10,000,000-8,500,000=1,500,000 Margin of safety ratio = margin of safety/sales margin of safety ratio = 1,500,000/10,000,000 = 15% (e)

• Break-Even Point and Margin of Safety

  The margin of safety in dollars and as a ratio are determined.

• Determine the Margin of Safety

  204455 Determine the Margin of Safety Question 1: A company makes a single product that it sells for $18 per unit. Fixed costs are $76,000 per month and the product has a contribution margin ratio of 40%.

• What is the margin of safety in dollars and percent of sales for Boston Company?

  Margin of safety = Current sales - Breakeven sales Current sales = $900,000 Breakeven sales = Fixed cost/contribution margin ratio Contribution margin ratio = (Selling Price - Variable cost)/Selling Price = (300-180)/300 = 40% Fixed cost = 270,000

• Contribution margin, break even point, margin safety ratio, fixed costs

  (c) Compute the contribution margin ratio and the margin of safety ratio. (d) Determine the sales dollars required to earn net income of $240,000. Tyson Company bottles and distributes LO-KAL, a fruit drink.

• Margin of Safety Calculations

  How many units would the company have to sell to attain target profits of $125,000? e. What is the company's margin of safety in dollars? f. What is the company's degree of operating leverage? Required: a.