The following information pertains to Luccas Company:Budgeted sales P1, 000, 000; Breakeven sales P700, 000; Budgeted contribution margin P600, 000. The margin of safety is:

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	P300, 000
B	P400, 000
C	P500, 000
D	P600, 000

Explanation:

Detailed explanation-1: -Break-even Sales = Total Fixed Costs / (Contribution Margin) Contribution Margin = 1-(Variable Costs / Revenues)

Detailed explanation-2: -Q: What is the breakeven sales level in units and dollars for a company that can make a unit of product for $7 in variable costs and sell it for $10, if the firm has fixed costs of $1, 800 per month? A: The breakeven point in units is $1, 800 ($10-$7) = 600 units.

Detailed explanation-3: -Answer and Explanation: The 1, 001st unit will contribute $250. Therefore, the 1, 001st unit sold will contribute $250.

There is 1 question to complete.