Molander Corporation is a distributor of a sun umbrella used at resort hotels. D

Question

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below Selling price Variable expenses Fixed expenses Unit sales $30 per unit S13 por uni $15,130 per month 1,040 units per montlh Required: 1 Compute the company's margin of safety. (Do not round intermediate calculations.) Margin of safety 2. Compute the company's margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34) Margin of safety

Explanation / Answer

Contribution margin=Sales-Variable costs

=(30-13)=$17

Hence breakeven=Fixed cost/Contribution margin

=(15130/17)=890 units

1.MOS=Total sales-Breakeven sales

=(1040-890)=150 units

=(150*30)=$4500

2.MOS%=(mOS/sales)

=(150/1040)=14.42%(Approx)

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