FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the
coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to
use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to
mass-produce any of them.
Waterways markets a simple water control and timer that it mass-produces, Last year, the company sold 630,000 units at an average
unit selling price of $4.40. The variable costs were $1,663,200, and the fixed costs were $742,896.
Show Transcribed Text
Margin of safety in dollars
What is the margin of safety, both in dollars and as a ratio? (Round ratio to 0 decimal places, e.g. 25%.)
Margin of safety ratio
3
$
Ć
%
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Transcribed Image Text:Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass-produce any of them. Waterways markets a simple water control and timer that it mass-produces, Last year, the company sold 630,000 units at an average unit selling price of $4.40. The variable costs were $1,663,200, and the fixed costs were $742,896. Show Transcribed Text Margin of safety in dollars What is the margin of safety, both in dollars and as a ratio? (Round ratio to 0 decimal places, e.g. 25%.) Margin of safety ratio 3 $ Ć %
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