#14 Randolph Corporation sells a single product at a price of $275 per unit. Var
ID: 2583211 • Letter: #
Question
#14 Randolph Corporation sells a single product at a price of $275 per unit. Variable cost per unit is $135 and fixed costs total $356,860. If sales are expected to be $825,000, what is the company’s margin of safety? #15 Roger Excavating Company experienced the following costs in 2016: Direct materials $1.75 per unit Direct labor $2.00 per unit Variable manufacturing overhead $2.50 per unit Variable selling $0.75 per unit Fixed manufacturing overhead $50,000 Fixed selling $15,000 Fixed administrative $5,000 During 2016, the company manufactured 100,000 units and sold 80,000 units. If the average selling price per unit was $22.65, what is the amount of the company’s contribution margin per unit? #14 Randolph Corporation sells a single product at a price of $275 per unit. Variable cost per unit is $135 and fixed costs total $356,860. If sales are expected to be $825,000, what is the company’s margin of safety? #15 Roger Excavating Company experienced the following costs in 2016: Direct materials $1.75 per unit Direct labor $2.00 per unit Variable manufacturing overhead $2.50 per unit Variable selling $0.75 per unit Fixed manufacturing overhead $50,000 Fixed selling $15,000 Fixed administrative $5,000 During 2016, the company manufactured 100,000 units and sold 80,000 units. If the average selling price per unit was $22.65, what is the amount of the company’s contribution margin per unit?Explanation / Answer
Answer to 14
Margin of Safety = Total Sale - Break Even Sale
= 825000 - 700962
= 124038
Working Note
Break Even Sale = Fixed Cost / Contribution Margin Ratio
= 356860 / 0.5091
= $700962
Contribution Margin Ratio = (Sale Price - Variable Cost) / Sales Price
= (275-135) / 275
= 50.91%
Answer to 15
Particulars Amt Sale Price 22.65 Less: Direct Material 1.75 Less: Direct labor 2.00 Less: variable manufacturing overhead 2.50 Less: variable selling overhead 0.75 Contribution Margin 15.65Related Questions
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