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 11,500 units.

Question

Quizplus · Accepted Answer

The margin of safety cannot be measured in units as it is a percentage or ratio. The correct statement would be: "The margin of safety is 25% (or $250,000) of the maximum possible sales."

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