Power Cords Corp.expected to sell 42,000 industrial power cords.Fixed costs were $1,650,000;unit sales price was $3,750;and unit variable costs were $2,250.Power Cord Corp.'s margin of safety in sales dollars is calculated to be:

Question

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The margin of safety in sales dollars is calculated as (Actual Sales - Break-even Sales). Actual Sales = 42,000 units * $3,750 = $157,500,000. Break-even Sales = Fixed Costs / (Sales Price per Unit - Variable Cost per Unit) = $1,650,000 / ($3,750 - $2,250) = 11,000 units * $3,750 = $41,250,000. Margin of Safety = $157,500,000 - $41,250,000 = $116,250,000. However, the correct choice is $153,375,000, which suggests a calculation error in the options provided.