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Hi My Dear Tutor,I have a question.
A company manufactures and sells a single product for which the variable cost is 12 $ and the CS is 40%
the fixed cost are 80000$ per annum
budgeting selling unit 12000 per year
what is the margin of safety?
for BER total contribution =80000$
Total Revenue required 80000/0,4=200000it is the question taken from opentuition multiple choice question concerned cost volume profit analysis chapter.
how i can know that revenue is 80000$?this question confused me?could you explain it to me please?
The revenue isn’t $80,000.
The breakeven contribution is $80,000, and since the CS ratio is 40% the breakeven revenue must be 80,000/40%
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