Thursday, 2 August 2012

Mohan Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning next

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

  Selling price $25  per unit
  Variable expenses $15  per unit
  Fixed expenses $8,500  per month
  Unit sales 1,000  units per month


Required:
1. Compute the company’s margin of safety. (Omit the "$" sign in your response.)

  Margin of safety $ 3,750 correct  

2.
Compute the company’s margin of safety as a percentage of its sales. (Omit the "%" sign in your response.)

  Margin of safety 15 correct %