Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is

Question

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $79,300. Swimkids expects sales of $277,600 next year. What is Swimkids's margin of safety?

Lambardi Company sells 3 types of bags.  Bag A sells for $16 and has variable cost of $9.00 per unit.  Bag B sells for $16 and has variable cost of $12.00 per unit. Bag C sells for $8 and has variable costs of $6.00 per unit. Lambardi sells in a mix of 2 units of A, 3 units of B and 5 units of C. What is the weighted average contribution margin per unit for Lambardi?

Please show work.

Explanation / Answer

Expected Sales = 277600

Fixed costs = 79300

Variable costs = 277600 - 79300 = 198300

Units = 198300/18 = 11016.666

Sales value = 11016.66 * 30 = 330500

Margin of Safety = 330500 - 277600 = 52900

2A + 3B + 5C

Fixed Costs =(16-9) + (16-12) + (8-6) = $ 13

WACM = 2 * ( 7) + 3*(4) + 5 * ( 2) = 14 + 12 + 10 = $ 36

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