The following information is provided: $\begin{array}{lr}
\text { Sales price per unit } & £ 70 \
\text { Variable cost per unit } & £ 45 \
\text { Fixed costs } & £ 50,000 \
\text { Expected sales } & 5,000 \text { units }
\end{array}$
The margin of safety is
A)2,000 units.
B)3,000 units.
C)5,000 units.
D)7,000 units.

Question

The following information is provided: $\begin{array}{lr}
\text { Sales price per unit } & £ 70 \
\text { Variable cost per unit } & £ 45 \
\text { Fixed costs } & £ 50,000 \
\text { Expected sales } & 5,000 \text { units }
\end{array}$
 The margin of safety is
A)2,000 units.
B)3,000 units.
C)5,000 units.
D)7,000 units.

Quizplus · Accepted Answer

The difference between the two figures is 3,000 units, which represents the margin of safety. Therefore the answer is B.

The Following Information Is Provided The Margin of Safety Is A)2,000 Units

The Following Information Is Provided The Margin of Safety Is
A)2,000 Units