If the unit selling price is $40,the volume of sales is $3,000,000,sales at the break-even point amount to $2,500,000,and the maximum possible sales are $3,300,000,the margin of safety is 12,500 units.

Question

Quizplus · Accepted Answer

The margin of safety is calculated as the difference between the maximum possible sales and the break-even point sales, which is $3,300,000 - $2,500,000 = $800,000. Dividing this by the unit selling price of $40 gives a margin of safety of 20,000 units.

If the Unit Selling Price Is $40,the Volume of Sales