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Junior Member
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Feb 1, 2015, 10:55 AM
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Accounting Break Even Dollar Sales Question Need Help
| slo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): |
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| Sales |
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22,100 |
| Variable expenses |
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12,700 |
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| Contribution margin |
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9,400 |
| Fixed expenses |
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7,708 |
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| Net operating income |
$ |
1,692 |
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Question : What is the margin of safety in dollars?
MY WORK : I took the sales of $22,100 and I subtracted the break even sales at 820 units (break even point in unit sales which was marked correct for me) of $18,124 ( break even dollar sales which was marked correct for me) and I got $3976 which was marked wrong. I tried rounding up to $3980 but this was marked incorrect. I want to also say that I got the margin of safety percentage correct which I obtained by taking 3976 and dividing it by 22,100 sales to get 18%. |
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