76. The following monthly data are available for the Eager Company and its only

Question

76. The following monthly data are available for the Eager Company and its only product: Unit variable expenses Total fixed expenses. Actual sales for the month of March.... S75 S30 S180.000 7,000 units Required: Calculate the following items: 1. Unit CM 2. CM Ratio 3. B/E in Units Sale 4. B/E in Sales Dollars 5. The unit sales to attain the company's monthly target profit of S11,000 6. The Sales dollars to attain the company's monthly target profit of S12000 7. Margin of Safety in Units and dollars.

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. 1. Unit Sale Price 75 Less: Unit Variable Cost 30 Unit CM 45 2. CM Ratio Unit CM/Unit Sale Price 45/75 60% 3. BE in Unit Sales Fixed Cost/Unit CM 180000/45 4000 Units 4. BE in Sales $ Fixed Cost/CM Ratio 180000/60% 300000 $ 5. Target Profit 11000 (Fixed Cost+Target Profit)/Unit CM (180000+11000)/45 4245 Units 6. Target Profit 12000 (Fixed Cost+Target Profit)/CM Ratio (180000+12000)/60% 320000 $ 7. Margin of Safety Actual Sales-BE Sales Units 7000-4000=3000 $ (7000*75)-300000=225000

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