Safari File Edit View History Bookmarks Window Help ezto 31A

Safari File Edit View History Bookmarks Window Help ezto. 3-1A Group Work Ch 3 ACCOUNTING Group Work Ch 3 Question 3 (of 4) 3. 250 points Exercise 3-11A Margin of safety LO 3-4 Benedetta Company makes a product that sells for $30 per unit. The company pays $11 per unit for the variable costs of the product and incurs annual fixed costs of $159,600. Benedetta expects to sell 22,000 units of product Required: Determine Benedetta\'s margin of safety expressed as a percentage. (Round your answer to 2 decimal places. (i.e., 2345 should be entered as 23.45)) References eBook &Resources; Worksheet Difficulty: 2 Medium Exercise 3-11A Margin of safety LO 3-4 Learning Objective: 0 interpret the margin of safety measure 03-04 Calculate and 3

Solution

Break even point = 159600/(30-11)= 8400 Margin of safety % = (22000-8400)/22000= 61.82%