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: Break-evn point indollras, sales units necessary to attain desired income, and margin of safety ration for current operations.

I have break-even 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*500-n*300-800,000=0

2OON=800,000

n=4000

net income: 500n-300n-800,000=400,000

200n=1.2Million

n= 6000 units to net 400,000

## Answer this Question

## Related Questions

- Accounting - Larry sells each unit for $500. Variable costs per unit equal $300...
- accounting - "Harris Company manufactures and sells a single product. A ...
- accounting - Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs ...
- math - Bentley Plastics Ltd. has annual fixed costs of $450,000 and variable ...
- Marketing - Explain why fixed and variable costs per unit decline as sales ...
- accounting - Mendez Company currently produces and sells 20,000 units of product...
- Accounting - CollegePak Company produced and sold 60,000 backpacks during the ...
- accounting - Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs ...
- managerial accounting - Using the data below please do the following in an Excel...
- FINANCE - Need help on this Study Problem. Chevy's Manufacturing has fixed costs...

More Related Questions