Required: |
|
What is the company’s contribution margin (CM) ratio? |
2. [The following information applies to the questions displayed below.]
Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company’s monthly fixed expense is $5,500.Required:a.Compute for the company’s break-even point in unit sales using the equation method.b. Compute for the company’s break-even point in sales dollars using the equation method and the CM ratio. (Do not round intermediate calculations. Round your CM ratio to 2 decimal places.) CM ratio______________________ Break-even point in dollar sales________________________________
4. Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next month’s budget appear below: |
Selling price |
$25 |
per unit |
|
Variable expenses |
$15 |
||
Fixed expenses |
$8,500 |
per month |
|
Unit sales |
1,000 |
units per month |
Compute the company’s margin of safety. |
b. Compute the company’s margin of safety as a percentage of its sales. (%)