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Variable cost per unit- $12
C/S ratio- 40%
Fixed cost – $80,000
Budgeting sales production – 12,000 unitscan you help me with the math working ?
Thanks.
The selling price is 12 / (1 – 0.4) = $20 per unit.
The breakeven sales revenue = 80,000/0.4 = $200,000.
The breakeven sales units = 200,000 / 20 = 10,000The margin of safety = (12,000 – 10,000) / 12,000 = 16.67%
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