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The Rouge Company sells sports decals that can be personalized with a player's name, a team name, ...

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The Rouge Company sells sports decals that can be personalized with a player's name, a team name, ...

The Rouge Company sells sports decals that can be personalized with a player's name, a team name, and a jersey number for $5 each. Rouge buys the licensed decals from a supplier for $1.25 each and spends an additional $0.75 in variable operating costs per decal. The results of last month's operations are as follows:

Sales revenue	$10,000
Cost of goods sold	2,500
Gross profit	7,500
Operating expenses	3,000
Operating income	$ 4,500

Required:

a.	What is Rouge's monthly break-even point in units? In dollars?

b.	What is Rouge's margin of safety (both units and dollars)?

Textbook

Managerial Accounting

Edition: 4^th

Author: Davis

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wardasid

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jdot Author

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Good timing, thanks!

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