Vintage Weaponry is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 40 flintlock muskets per month.Data are as follows:

If Vintage expects to sell 60 units per month,how much is his margin of safety expressed in sales revenue?

Question

Vintage Weaponry is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 40 flintlock muskets per month.Data are as follows:

If Vintage expects to sell 60 units per month,how much is his margin of safety expressed in sales revenue?

Quizplus · Accepted Answer

C)
 11ea86ed_2bab_9f17_8b27_15ca9558db5b_TB3056_00 Breakeven sales in units = (Fixed costs + Target profit)/ Contribution margin per unit
Breakeven sales in units = ($10,230 + 0)/ $330 = 31 units
Expected sales - Breakeven sales = Margin of safety in units
60 units - 31 units = 29 units
Margin of safety in units × Sales price per unit = Margin of safety in dollars
29 units × $800 per unit = $23,200

Vintage Weaponry Is Owned and Operated by a Craftsman Who