I could care less about just an answer. I want to know how to do these types of

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I could care less about just an answer. I want to know how to do these types of problems Please help by explaining how to do these

3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit / Fixed expenses 20,000 units S60 per unit $45 per unit $240,000 9 Enter a formula into each of the cells marked with a ? below 10 Review Problem: CVP Relationships 12 Compute the CM ratio and variable expense ratio 13 Selling price per unit 14 Variable expenses per unit 15 Contribution margin per unit 16 17 CM ratio 18 Variable expense ratio 19 20 Compute the break-even 21 Break-even in unit sales 22 Break-even in dollar sales 23 24 Compute the margin of safety 25 Margin of safety in dollars 26 Margin of safety percentage 27 28 Compute the degree of operating leverage 29 Sales 30 Variable expenses 31 Contribution margin 32 Fixed expenses 33 Net operating income 34 35 Degree of operating leverage S60 per unit 45 per unit $15 per unit 25% 75% 16,000 units $960,000

Explanation / Answer

25) Margin of Safety in dollars

= Total sales - Break Even sales

= 20000 units x $60 / unit - $ 960000

= $ 1200000 - $960000

= $ 240000

Alternatively:

Margin of safety

= Profit / CM Ratio

= (total contribution - fixed expenses) / CM Ratio

= (20000 * $15 - $240000) / 25%

= $ 240000

26) Margin of safety percentage

= Margin of safety in dollars / Total sales in dollars

= $240000 / $1200000

= 0.20 = 20%

Particulars Formula Amount Sales 20000 unit x $60 per unit $ 12,00,000 Less: Variable Expenses 20000 unit x $45 per unit $   9,00,000 Contribution margin $   3,00,000 Less: Fixed expenses $   2,40,000 Net Operating Income $ 60,000 Degree of Operating Leverage Contribution Margin / Operating Income 5

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