A company manufactures a single product. Below are the budgeted costs for the next financial period: Selling price per unit R24 Variable production cost per unit R8.60 Fixed production costs R650 000 Fixed selling and distribution costs R230 400 Sales commission 5% of selling price Sales 90 000 units The margin of safety is: a. None of the above b. 37.7% c. 30.0% d. 37.4% e. 31.1%

A company manufactures a single product. Below are the budgeted costs for the next financial period: Selling price per unit R24 Variable production cost per unit R8.60 Fixed production costs R650 000 Fixed selling and distribution costs R230 400 Sales commission 5% of selling price Sales 90 000 units The margin of safety is: a. None of the above b. 37.7% c. 30.0% d. 37.4% e. 31.1%

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.16E

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Question

A company manufactures a single product. Below are the budgeted costs for the next financial period:

Selling price per unit R24

Variable production cost per unit R8.60

Fixed production costs R650 000

Fixed selling and distribution costs R230 400

Sales commission 5% of selling price

Sales 90 000 units

The margin of safety is:

None of the above

37.7%

30.0%

37.4%

31.1%

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