FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Oriental Furnitures makes three types of quality wooden furniture. Information for these three products are shown below:

 

A1

A2

A3

Total

Selling price per unit

$200

$500

$1 000

 

Variable cost per unit

$60

$250

$600

 

Expected unit sales (annual)

15,000

7,000

2,000

24,000

Sales mix

60 percent

30 percent

10 percent

100 percent

Total annual fixed costs are $4,000,000. Assume the sales mix remains the same at all levels of sales.

Required:  SHOW YOUR WORKINGS FOR ALL SECTIONS

 

  1. Calculate in sales units the margin of safety for Oriental Furnitures, assuming projected sales are 24 000 units? 
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