Finance question homework help please

Posted on 2014-03-14 09:54:00 in Finance by CINDYYY

Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $45, and the fixed costs per month are $5,000. The margin of safety is:



Calculate Contribution Margin Ratio = (Unit Sales Price - Unit Variable Cost)/ Unit Sales Price = Ratio * Fixed Cost = Break even point in dollars (BEP)



Calculate Margin of Safety = (#units * sales price) - BEP = Margin of Safety



So with that being said,



It should be (100-45)/100=.55

.55*5000=2750



(150*100)-2750=12250 <----- thats my answer,



I have the solution, and its 5909.09 I dont get it.. help please

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