Molander Corporation is a distributor of a sun umbrella used at resort hotels. D

Question

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below:

1. Compute the company’s margin of safety. (Do not round intermediate calculations.)
Margin of Safety____________

2. Compute the company’s margin of safety as a percentage of its sales. (Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).
Margin of Safety________________

Selling price $29 per unit Variable expenses $13 per unit Fixed expenses $12,960 per month Unit sales 960 units per month

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Sales price per unit                     29.00 Variable cost per unit                  (13.00) Contribution per unit                     16.00 Fixed expenses            12,960.00 Break even sales in units = 12,960/16                  810.00 Break even sales in $ = 810 *29            23,490.00 Actual Sales = 960 * 29            27,840.00 Margin of safety in $ = 27,840 - 23,490               4,350.00 Margin of safety as % of sales = 4350/27,840 15.63%

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