FINANCIAL ACCOUNTING
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Transcribed Image Text:Margin of Safety
Head-First Company plans to sell 4,950 bicycle helmets at $72 each in the coming year. Unit variable cost is $45 (includes direct
materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed
factory overhead and fixed selling and administrative expense). Break-even units equal 1,833.
Required:
1. Calculate the margin of safety in terms of the number of units.
X units
2. Calculate the margin of safety in terms of sales revenue.
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- Business Solutions sells upscale modular desk units (60% of sales) and office chairs (40% of sales). Selling prices are $1,160 per desk unit and $690 per chair. Variable costs are $695 per desk unit and $345 per chair. Fixed costs are $204,330. Required: 1. Compute the weighted-average contribution margin. 2. Compute the break-even point in units. 3. Compute the number of units of each product that would be sold at the break-even point. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the weighted-average contribution margin. (Round your final answer to the nearest whole number.) Weighted-average contribution margin Business Solutions sells upscale modular desk units (60% of sales) and office chairs (40% of sales). Selling prices are $1,160 per desk unit and $690 per chair. Variable costs are $695 per desk unit and $345 per chair. Fixed costs are $204,330. Required: 1. Compute the weighted-average contribution margin. 2.…arrow_forwardCan you help me with CVP Drill #14?arrow_forwardMargin of Safety Head-First Company plans to sell 5,180 bicycle helmets at $72 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,833. Required: 1. Calculate the margin of safety in terms of the number of units. units 2. Calculate the margin of safety in terms of sales revenue.arrow_forward
- ETYMISHTE 16598 (AIYv, i un Miyul 2. Prepare a horizontal analysis of Fantasy Football's 2024 balance sheet using 2023 as the base year. (Values to be deducted and decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.) Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Answer is complete but not entirely correct. FANTASY FOOTBALL Balance Sheets December 31 $ 2024 Year 2023 190,800 $ 284,800 748,800 835,200 1,839,600 1,094,400 158,400 92,800 1,123,200 1,123,200 (460,800) (230,400) $ 3,600,000 $ 3,200,000 $ 151,200 $ 80,000 0 3,200 86,400 86,400 950,400 950,400 Increase (Decrease) Amount % 94,000,000 86,400,000 X…arrow_forwardAssume Hairy-Cairy Salon, a hair styling salon in Matthews, NC, provides cuts, perms, and hairstyling services. Annual fixed costs are $225,000, and variable costs are 40 percent of sales revenue. Sales revenue totaled $450,000. Determine the margin of safety in sales dollars.arrow_forwardBusiness Solutions sells upscale modular desk units (60% of sales) and office chairs (40% of sales). Selling prices are $1,340 per desk unit and $590 per chair. Variable costs are $805 per desk unit and $295 per chair. Fixed costs are $171,210.Required:1. Compute the weighted-average contribution margin.2. Compute the break-even point in units.3. Compute the number of units of each product that would be sold at the break-even point.arrow_forward
- Manly Beach Enterprises projects the following information for the coming year. Sales Production 1,900 units 2,000 units Selling price per sewing machine Total variable manufacturing cost Total fixed manufacturing cost Marketing and administrative cost (40% variable based on sales) $200 $160,000 $60,000 $80,000 a. Determine the projected net income using absorption costing: $ b. Determine the projected net income using variable costing: $arrow_forwardplease answer all three requirements thankuarrow_forwardHead-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 5.50 Variable factory overhead per helmet 2.00 Total fixed factory overhead 20,000 Variable selling expense is a commission of $2.90 per helmet; fixed selling and administrative expense totals $29,500. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Head-First Company for the coming year.arrow_forward
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