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  • Jan 8, 2017, 10:08 PM
    tiger3
    Preparing for an exam
    Can some one help me solve this problem please.
    Information provided:

    Egret Corp is a wholesaler that sells a single product and maintains a stable cost structure. Management has provided the following data for two months

    May June

    Sales Revenue $577,500 $1,155,000
    Gross Margin $364,700 $ 854,700
    Net Operating income(loss)$(39,000) $ 422,700
    Selling price per unit $ 165 $ 165

    Suppose the price remains the same. The best estimate of the margin of safety in July at the sales volume below is:
    Sales volume in July: 6,500 units

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