Margin of safety question

beavis182

am struggling with a Breakeven then Margin of safety question on ECR

The question is and the answers i have are as follows and i wud be grateful if someone cud let me know if remotely correct :-)

Selling price P/U = £25
Variable cost P/U = £10
Budgeted fixed costs = £150,000
Budgeted sales = 15,000 units

for break even i have 10,000 units
(fixed costs/contribution cost)
(150,000/15 = 10,000)

Margin of safety i have got 5000 units
(sales-breakeven = margin of safety)
(15000-10000 = 5000

to show it as sales revenue i have £250,000
(breakeven units x selling price)
(10,000 x 25 = 250,000)

Please let me know if correct or where ive gone wrong. cheers

SandyHood

Well done
Break even
10,000 units
revenue £250,000

Margin of Safety
5,000 units
or 33.3% of the budgeted sales

beavis182

yay... i see hope now and may actually pass! :-)

thanks for that