Question

Majid Corporation sells a product for $140 per unit. The product's current sales are 41,200 units and its break-even sales are 32,370 units. What is the margin of safety in dollars

Answer 1

the margin of safety in dollars is $1,236,200

Step-by-step explanation:

The computation of the margin of safety in dollars is shown below:

= Total sales - break even sales

= (41,200 units - 32,370 units) × $140 per unit

= $1,236,200

We simply deduct the break even sales from the total sales so that the margin of safety in dollars come

Hence, the margin of safety in dollars is $1,236,200