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ID: 2424675 • Letter: I
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iPad 1:16 PM 91% lii0 C https://www.chegg.com/stu x WileyPLUS Dedugen.wileyplus.com/edugen/lti/main.uni# Exercise 18-17 Ch r 18 Exercises Oak Bucket Co., a manufacturer of wood buckets, had the following data for 2013 Exercise 18-1 Exercise 18-2 (Part Exercise 18-2 Exercise 18-3 (Part Level Submission Exercise 18-3 Exercise 18-6 (Part Sales Sales price Variable costs Fixed costs 2,500 units $43.00 per unit $18.92 per unit $14,224 Your answer is correct. Exercise 18-6 Exercise 18-8 Exercise 18-9 Exercise 18-10 Exercise 18-12 (Part Level Submission What is the contribution margin ratio? Contribution margin ratio 56% Exercise 18-14 (Part Level Submission Exercise 18-14 Exercise 18-15 Exercise 18-17 (Part Level Submission LINK TO TEXT Your answer is correct. What is the break-even point in dollars? Review Score Review Results by Stud Objective Break-even point 25400 Your answer is incorrect. Try again. what is the margin of safety in dollars and as a ratio? (Round ratio to 2 decimal places, eg, 12.25%.) Margin of safety Margin of safety ratio 22900 9.16% Your answer is incorrect. Try again. If the company wishes to increase its total dollar contribution margin by 41% in 2013, by how much will it need to increase its sales if all other factors remain constant? (Round answer to 0 decimal places, e.g. 2,520.) Total increase in sales required 34712 Click if you would like to Show Work for this question: Open Show WorkExplanation / Answer
MARGIN OF SAFTEY = ACTUAL SALES - BEP SALES
= (2500 *$43) - $25400
= $107500 - $25400
= $82100
MARGIN OF SAFTEY RATIO = MARGIN OF SAFTEY / ACTUAL SALES
= $82100 / $107500
= 76.37%
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SALES (2500 * $43) = $107500
LESS VARIABLE COST (2500 *$18.92) = ($47300)
CONTRIBUTION MARGIN = $60200
ADD INCEREASE BY 41% ($60200 * 41%) = $24682
NEW CONTRIBUTION MARGIN = $84882
NEW SALES= NEW CONTRIBUTION MARGIN / CONTRIBUTION MARGIN RATIO
= $84882 / 56%
= $151575
INCEREASE IN SALES REQUIRED ($151575 - $107500) = $44075
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