## Question

###### Can you please explain how to do the last three blank boxes Out Box Docs prepares...

can you please explain how to do the last three blank boxes

Out Box Docs prepares mange for growing business For 2017, buted revues are 2.400.000 on 600 akting plans Manage rate per plan of $4,000. The company would like to achieve a margin of safety percentage of at least 30% The company'ournedos e $100,000 and are costs average $2.000 per marketing plan Read the ents Requirement 1. Calculate Oute Box Doesbreakeven point and margin of sale in units First, determine the formula used to colate the breakeven point in uns, then calculate the number of marketing plans that must be sold to break even Fed costs Contribution margin peruit - Braven number of units $ 100.000 2.000 Now termine the formula od to calculate the margin of safety in units, the cost the result Budgeted sales quantity Breakeven quantity - Margin of safety in units Requirement 2 Which of the following charges would help Outta Box Docs achieve its desired margin of safety? a. Average revenue per customer innses to $4.700: D. Planned number of marketing plans prepared increases by 10%:. Out Box Docs purchases new software that results in a 5% increase to od costs but reduces variable costs by 12% per marketing plan. Round al margin of safety percentages to the nearest whole percent. XXX Round even units up to the next whole unit) Margin of safety percentage Fint calculate the current margin of s y percentage Margin of safety in doters Budgeted revenues 200,000 2,400,000 a. The average revenue perustomer increases to $4.700. - Out Box Docs' breakevenumber of units now os and is margin of safety percentage is now This change help Out Box Docs achieve its desired margin of safety of 30%

## Answers

2a)

With increase in revenue per customer to $ 4700 ,contribution margin per customer is increased to 4700-2000 = $ 2700

Breakeven point = Fixed cost /contribution margin

= 1080000/2700

= 400

Breakeven number of units is now 400 units

ii)Margin of safety in units = Budgeted quantity - breakeven units= 600 -400

= 200

Margin of safety in %= Margin of safety in units /budgeted quantity

= 200 /600

= 33.33% (rounded to 33%)

Margin of safety % is now 33%

iii)

This changes will help Outfix box docs achieve its desired margin of safety of 30%

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