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HARE EVENTS DEC 16
We have to find margin of safety of Full MarathonFixed costs are $385000
Contribution Per unit FULL MARATHON $36.8Combined Weighted Avg/Unit of Full Marathon and Half Marathon is 29.05
How we can find the breakeven point by Fixed costs/Cont per unit of Marathon?
Kindly help me?The question asks for the margin of safety if they decide to only have the full marathon.
Therefore for this question the half marathon is irrelevant.
So the breakeven is 385,000/36.8 = 10,462, and the margin of safety is therefore
(20,000 – 10,462) / 20,000 = 47.7%
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