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StormLrd StormLrd
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6 years ago
Query Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are:
1.   paying a fixed booth fee of $5,010, or;
2.   paying an $4,000 fee plus 10% of revenue made at the convention, or;
3.   paying 20% of revenue made at the convention.

Required:
a.   Compute the break-even sales in pillows of each option.
b.   Which option should Query Company choose, assuming sales are expected to be 800 pillows?
c.   Calculate the margin of safety for Option 1 if sales are expected to be 300 pillows.
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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pachopacho
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-Michigan State University

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#2
3 years ago Edited: 3 years ago, Chanlika Chaysak
Thanks  Smiling Face with Open Mouth
Post Merge: 3 years ago

thanks
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