Bono manufacturing makes a product that currently sells for, Ask an Expert

Accounting

Bono Manufacturing makes a product that currently sells for $20 each. The variable costs to make this product are $12 per unit. Fixed costs total are $800,000 per year.

A. How many units must be sold to break even?

B. What will be the company's sales revenue ($) at the break-even point?

C. Assume that the company's current sales are $2.6 million (130,000 units) per year. Calculate the company's margin of safety:

i. in dollars

ii. in units

iii. as a percentage

D. Assume that one of Bono's major competitors has a margin of safety of 35%. Which company is more recession proof: Bono or its competitor? Why?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9799221

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