Homework Help: Accounting

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 - Canine Company produces and sells dog treats for discriminating ...
accounting - Mendez Company currently produces and sells 20,000 units of product...
accounting - Canine Company produces and sells dog treats for discriminating pet...
accounting - Cournot Company sells 100,000 wrenches for $12 a unit. Fixed costs ...
accounting - Mia Enterprises sells a product for $90 per unit. The variable cost...
Marketing - Explain why fixed and variable costs per unit decline as sales ...
Accounting - Candace Corporation has decided to introduce a new product that can...
accounting - Fixed Company produces a single product selling for $30 per unit. ...

For Further Reading

First Name:
School Subject:
Answer: