% margin of safety
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Has anyone worked out since the exam the correct figures for the % margin of safety. I put 16.67 and 23.08.<BR>However a friend of mine has convinced me this is wrong as she put the opposite to this. 83.33 and 76.92.<BR>I have also seen 20 and 30% mentioned.<BR>I can't remember all the figures but if I'm correct for one of the answers it was fixed costs = 1,000,000 / £1.25 contribution which equalled a break even of 800,000. <BR><BR>The output was 4,800,000. If that is so then isn't it 4,800,000 - 800,000 (BE) = 4,000,000/480,000.<BR>This would equal 83.33%. That seems extremely high though.<BR><BR>The costings tutorial on p218 shows this fomula above though. I'm really confused now.
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% margin of safety
I got the same results for my margin of safety. Looking at the other posts on other threads I think most people got the same 16.67 and 23.08%0 -
% margin of safety
% margin of safety is (no budgeted - no to breakeven) / no budgeted *100.<BR>Best of luck0 -
% margin of safety
If I remember correctly the figures were: (£480,000 - £400,000) / £480,000 x 100/1 which does give 16.67% (to two decimal places)0 -
% margin of safety
still confused really.<BR><BR>fixed costs/contribution - 1,000,000 / 1.25 = 80,000 which is break even. This is a very low break even figure.<BR><BR>480,000 (output) - 80,000 (BE) = 400,000/480,000 x 100 = 83.33%<BR><BR>Have I gone mad or does this make sense.0 -
% margin of safety
1,000,000/1.25=800,000 not 80,000<BR><BR>800,000/480,000*100%=16.67%0 -
% margin of safety
<br><br><< <i>1,000,000/1.25=800,000 not 80,000<BR><BR>800,000/480,000*100%=16.67%</i> >><br><br><BR><BR>Now I have that wrong, it made sense a minute ago0 -
% margin of safety
I should have put 100,000/1.25 = 80,000<BR>Therefore 480,000 - 80,000 / 480,000 x 100 = 83.330 -
% margin of safety
I think your friend has me convinced now too, and, I should say, very worried. I can't see what I have done or how it should be, but, if I fail, it just means a re-sit in December <img src="i/expressions/face-icon-small-sad.gif" border="0"><BR><BR>Time for me to start panicking about FRA now though I think, what's done is done whether it's right or wrong!<BR>Best Of Luck!0 -
% margin of safety
16.67 and 23.08 are correct.<BR><BR>Any who worked out at 20% and 30% worked out the margin of safety units as a % of break even units.. I know this because i nearly did the same.<BR><BR>Andy0 -
% margin of safety
I agree although most people seem to have put 16.67 and 23.08 and a few 20 and 30%.<BR>The Break Even seems very low. I can't see that affecting your result too much unless you did lots of other bits wrong. The rest of that table will be correct except the % of safety.<BR><BR>Best of luck to you as well.0 -
% margin of safety
My answers were 16.67 and 23.08. The Contribution was 2.50 not 1.25 for B and 3.50 for C<BR><BR>1,000,000 fixed costs/2.50 = 400,000 units( break even point)<BR><BR>Margin of Safety = Budgeted units 480,000 - breakeven units 400,000 <BR> = 80,000/480,000 budgeted units x 100<BR> = 16.67%<BR><BR>Used the same method for C.<BR><BR>Hope this is correct.<BR>Kath0 -
% margin of safety
Oh yes that makes much more sense! What a relief, was beginning to get worried!<BR><BR>Thanks and good luck!0 -
% margin of safety
Me relieved too. Now you mention 2.50 and 3.50. Must admit a bit spooky that the % figure works out exactly the opposite with 1.25. I think that figure was somewhere in the first table.<BR>Thanks Kath there was a drink riding on that debate so I shall claim it and toast you with it.0 -
% margin of safety
i put 16 and 23 then changed it for the wrong answer<BR>gutted0 -
% margin of safety
<br><br><< <i>16.67 and 23.08 are correct.</i> >><br><br><BR><BR>Sound farmiliar to my figures, phew!0