Question

Cubie corporation has provided the following data concerning its only product: selling price $ 106 per unit current sales 11,000 units break-even sales 9,240 units what is the margin of safety in dollars?

O $1,166,000
O $186,560
O $979,440
O $822,730

Answer 1

The margin of safety in dollars is $186,560.

option b is the correct

Step-by-step explanation:

To calculate the margin of safety in dollars, we need to find the difference between the current sales and the break-even sales. The formula to calculate the margin of safety is:

Margin of Safety = Current Sales - Break-even Sales

Substituting the given values:

Margin of Safety = 11,000 units - 9,240 units

Margin of Safety = 1,760 units

To find the margin of safety in dollars, we multiply the margin of safety by the selling price per unit:

Margin of Safety in Dollars = Margin of Safety * Selling Price per Unit

Substituting the given values:

Margin of Safety in Dollars = 1,760 units * $106 per unit

Margin of Safety in Dollars = $186,560