Question

​Moe's Pizza Shop sells a large pizza for​ $12.00. Unit variable expenses total​ $8.00. The breakeven sales in units is​ 7,000 and budgeted sales in units is​ 8,000. What is the margin of safety in​ dollars?

Answer 1

$12,000

Step-by-step explanation:

Margin of safety = Current sales level - Break even point

=(8,000 ×12) - (7,000 × 12)

= 96,000 - 84,000

= $12,000