Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonthly fixed costs are $500,000. If your company is earning their target income amount of $2,400,00, what is the margin of safety expressed in both units and dollars?

Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonthly fixed costs are $500,000. If your company is earning their target income amount of $2,400,00, what is the margin of safety expressed in both units and dollars?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8E

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

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Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and total
monthly fixed costs are $500,000. If your company is earning their target income amount of $2,400,00, what is the margin of safety expressed in both units and dollars?

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