Question 1: Swimkids is a swimsuit manufacturer. They sell swim suits at a selli

Question

Question 1:

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $73,800. Swimkids expects sales of $261,200 next year. What is Swimkids's margin of safety(in dollars)?

Question 2:

Lambardi Company sells 3 types of bags.  Bag A sells for $19 and has variable cost of $9.00 per unit.  Bag B sells for $15 and has variable cost of $12.00 per unit. Bag C sells for $7 and has variable costs of $6.00 per unit. Lambardi sells in a mix of 2 units of A, 3 units of B and 5 units of C. What is the weighted average contribution margin per unit for Lambardi?

Explanation / Answer

Breakeven Sales = (73,800/(30-18))*30 = 184,500

Margin of Saftey = 261,200-184,500 = 76,700.

In % = 76,700/261,200 = 29.36%

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