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The Rose Williams Company has a C/M ratio of 36%. Breakeven sales are Rs. 160,000. The...

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Accounting

The Rose Williams Company has a C/M ratio of 36%. Breakevensales are Rs. 160,000. The company earned a profit of Rs. 28,800during the year.

Required:                                    

(a)   Fixed expense.          (b)   Variable expense for theyear
(b)   Sales for year           (d)   Margin of safety ratio.

Answer & Explanation Solved by verified expert
3.6 Ratings (473 Votes)

Breakeven sales          160,000
Multiple by: Contribution Margin Ratio 36%
Fixed expense            57,600
Fixed expense            57,600
Add: Profit earned            28,800
Total contribution            86,400
Divided by: Contribution Margin ratio 36%
Sales for the year          240,000
Sales          240,000
Less: Total contribution            86,400
Variable expense          153,600
Sales          240,000
Less: Breakeven sales          160,000
Margin of safety in dollars            80,000
Divided by: Sales          240,000
Margin of safety ratio 33.333333%

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