Margin of Safety (in $) Margin of Safety % Degree of Operating Leverage Expected % change in operating income (%)
Margin of Safety (in $) Margin of Safety % Degree of Operating Leverage Expected % change in operating income (%)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 22E: Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart...
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please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Exhibit 1: Assumptions (Both Products) |
|
Product #1: |
Launch-it |
Sales price per unit |
$ 10.00 |
Variable costs per unit: |
$ 4.00 |
Monthly volume |
240 |
|
|
Product #2: |
Treat-time |
Sales price per unit |
$ 30.00 |
Variable costs per unit: |
$ 14.00 |
Monthly volume |
160 |
|
|
Total fixed costs per month |
$ 1,500.00 |
|
|
Target profit per month |
$ 8,000.00 |
|
|
Margin of Safety (in $) |
|
|
|
Margin of Safety % |
|
|
|
Degree of Operating Leverage |
|
|
|
Expected % change in operating income (%) |
|
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