y D prelec CVP Target Prof, x 0.6708192692076855 1536621286231 the table provide

Question

y D prelec CVP Target Prof, x 0.6708192692076855 1536621286231 the table provided to answer the following question Summarized data for Ralph Corporation: Selling price Variable expenses Fixed expenses Unit sales $200 per unit 150 per unit $1,000,000 per year 25,000 units per year Question 1 of 1 What is Ralph Corporation's margin of safety in dollars? $4 million $5 million $1 million $2.2 million Slide 4 Reterences eBook& Resources Chapter 05 Learming Objective 7 Presentation Learning Objective: 05-07 Compute the margin of satety ere to search

Explanation / Answer

1. Breakeven Sales = Fixed expense / Contribution per unit

= 1000000/50 = 20,000 units

Therefore,margin f safety units = Total sales - Breakeven sales = 25,000 - 20,000 = 5,000 units

Margin of safety sales in dollars = 5000 * 200 = $1,000,000

Answer - $1 million.

2. Contribution margin ration = Contribution / sales = 1450000/ 2500000 = 58% Answer

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