Posted by Judy on Friday, August 20, 2010 at 1:14pm.
Larry sells each unit for $500. Variable costs per unit equal $300. Totalfixed costs equal $800,000. Larry is currently sellig 5,000 units per period and would like to earn net income of $400,00.
comput: Breakevn point indollras, sales units necessary to attain desired income, and margin of safety ration for current operations.
I have breakeven point: 4000
Desired sales: 204
Margin of safety? not sure where to go from here.

Accounting  bobpursley, Friday, August 20, 2010 at 1:31pm
Margin of safety is based on current sales, 5000.
break even: n*500n*300800,000=0
2OON=800,000
n=4000
net income: 500n300n800,000=400,000
200n=1.2Million
n= 6000 units to net 400,000
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