Question

Hyde's Headphones sells deluxe headphones for $75 each. Unit variable expenses total $45. The breakeven sales in units is 2,400 and budgeted sales in units is 4,200. What is the margin of safety in dollars

Answer 1

$135,000

Step-by-step explanation:

Calculation for What is the margin of safety in dollars

First step

2,400 x $75

= $180,000

4,200 x $75

= $315,000

The margin of safety $315,000 - $180,000

The margin of safety = $135,000

Therefore the margin of safety in dollars is $135,000