00:01
So suppose morrison's cooperation break -even is revenues of a million hundred thousand, and the fixed costs are 600 ,000, or rather 660 ,000.
00:23
So the first thing we're supposed to find is the contribution margin percentage.
00:30
So to get the contribution margin percentage, we need to find the break -even points the break -even point revenues is equal to the fixed cost divided by the contribution margin percentage.
00:58
So therefore, the contribution margin percentage will be equals to 660 ,000 divided by 1 ,100 ,000.
01:16
And this will give you 0 .60 or 60 % percent.
01:22
Percent contribution margin percentage.
01:27
The second thing we're to find is the selling price if the variable costs are $16 per unit.
01:52
So the contribution margin percentage is equal to the selling price minus the variable cost per unit divided by the selling price.
02:04
So 0 .60 would be equal to sp we're looking for the selling price right minus $16 we're giving the variable cost divided by the sp so therefore if you multiply the 0 .60 sp will be equals to sp minus $16 and then 0 .40 sp will be equals to $16 and then sp will be equal to $40.
02:49
So the selling price would be equals to $40.
02:53
Now the next question is suppose 75 ,000 units are sold.
03:00
So the quantity is 75 ,000 units.
03:06
So compute the margin of safety in units and in dollars.
03:10
So, so first of all, the break -even sales in units is equal to revenue divided by the selling price.
03:29
So this will give you $1 ,100 ,000 divided by $40...