Question

hyde's headphones sells deluxe headphones for $90 each. Unit variable expenses total $50. The breakeven sales in units is 2,000 and budgeted sales in units is 4,525. What is the margin of safety in dollars

Answer 1

See below

Step-by-step explanation:

Given the above information, margin of safety in dollars is computed as;

= (Total sales - Break even sales) × Sales price

= (4,525 - 2,000) × $90

= $227,250

Therefore, the margin of safety in dollars is $227,250