Margin of Safety Head-First Company plans to sell 4,810 bicycle helmets at $74 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,707. Required: 1. Calculate the margin

Question

Amber Wall

Business

31 December, 08:18

Margin of Safety Head-First Company plans to sell 4,810 bicycle helmets at $74 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,707. Required: 1. Calculate the margin

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Thaddeus Foley · Answer 1

The margin is $229,622

Explanation:

margin of safety = Total sales-Breakeven sales

(4810 - 1707) = 3103 units

= (3103*74)

= $229,622

Therefore, The margin is $229,622