Answer:
Option (d) is correct.
Step-by-step explanation:
Given that,
Selling price per unit = $130
Product's current sales = 12,400 units
Break-even sales = 11,036 units
Current sales = Number of units in sales × Selling price of each unit
= 12,400 units × $130
= $1,612,000
Break even sales in dollar amount:
= Break even sales × Selling price of each unit
= 11,036 units × $130
= $1,434,680
Therefore,
Margin of safety:
= Current sales in dollar amount - Break even sales in dollar amount
= $1,612,000 - $1,434,680
= $177,320
Hence, the margin of safety as a percentage of sales is as follows:
= (Margin of safety ÷ Current sales) × 100
= ($177,320 ÷ $1,612,000) × 100
= 0.11 × 100
= 11%