Question

Ruby Baker is the managerial accountant at the Seaside Motel. Ruby advised the Sales Manager that budgeted sales at the motel were 80​ rooms, and the​ motel's breakeven point is 10 units. What is the margin of safety in units at the Seaside​ Motel?

Answer 1

70 units

Step-by-step explanation:

Data provided as per the question below:-

Sales Unit = 80 units

Break-even Sales Unit = 10 units

The computation of margin of safety in units is shown below:-

Margin of Safety units = Sales Unit - Break-even Sales Unit

= 80 units - 10 units

= 70 units

Therefore for computing the margin of safety units we simply deduct the break-even the sales units from sales unit.