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Projected 20X1 annual data for Bobcat Company at a budgeted sales volume of 100,000 units,...

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Question

Accounting

Projected 20X1 annual data for Bobcat Company at a budgeted sales volume of 100,000

units,

and which manufactures and sells a single product, are shown in the table below.

Per unit

Total

Percent of sales

Selling price

$30.00

$3,000,000

100%

Variable expenses

12.00

1,200,000

40%

Contribution margin

18.00

1,800,000

60%

Fixed expenses

7.20

720,000

24%

Operating income

$10.80

$1,080,000

36%

Completely independent to any other solutions you may have computed, assume that the reak-even point in dollars for Bobcat Company is $1,600,000.

Calculate the margin of safety in dollars for Bobcat Company at the 100,000 unit sales volume given in the table above.

A.

$1,600,000

B.

$1,400,000

C.

$880,000

D.

$2,000,000

Answer & Explanation Solved by verified expert
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