Callicott Corporation produces a product that sells for $120 per unit. The product's current sales are 25,400 units and its break-even sales are 18,542 units. What is the margin of safety in dollars?
A)$822,960
B)$2,032,000
C)$3,048,000
D)$2,225,040

Question

Quizplus · Accepted Answer

Margin of Safety = (Current Sales - Break-Even Sales) x Selling Price per unit

Margin of Safety = (25,400 - 18,542) x $120 = $822,960

Therefore, the margin of safety in dollars is $822,960. Option A is the correct choice.

Callicott Corporation Produces a Product That Sells for $120 Per