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