Margin of safety question
beavis182
Registered Posts: 130 Dedicated contributor 🦉
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
(salesbreakeven = margin of safety)
(1500010000 = 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
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
(salesbreakeven = margin of safety)
(1500010000 = 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
0
Comments

Well done
Break even
10,000 units
revenue £250,000
Margin of Safety
5,000 units
or 33.3% of the budgeted salesSandy
sandy@sandyhood.com
www.sandyhood.com0 
yay... i see hope now and may actually pass! :)
thanks for that0
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