Final answer:
The margin of safety in units, when Lamar produces and sells 87,000 units, is calculated as the units sold minus the break-even point. It illustrates how much sales can fall before reaching the break-even point.
Step-by-step explanation:
If Lamar produces and sells 87,000 units, the margin of safety in units is defined as the difference between the actual sales and the break-even point. The correct answer to the question, 'If Lamar produces and sells 87,000 units, what is the margin of safety in units?' is (d) Units sold minus Break-even point.
In a business context, the margin of safety is a measure of how much sales can drop before a business reaches its break-even point. It is an important indicator of financial flexibility and a buffer against uncertainties. To calculate the margin of safety, you need to know the number of units sold and the break-even point. This information isn't provided in the question, but the method is clear: subtract the break-even point in units from the units sold.