Compute the margin safety in sales dollars


Given: laptop sells for $1,000 per unit. Variable cost per unit is $400. Monthly fixed costs are $2,400,000. Compute the following: 1)Break even point in units and in total sales dollars. 2)Contribution margin ratio. 3)Level of total sales that would be required to earn a target profit of $600,000. 4) If the manager expects to sell a total of $6,000,000, compute the margin safety in sales dollars.

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Accounting Basics: Compute the margin safety in sales dollars
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