Majid Corporation sells a product for $240 per unit. The product's current sales are 41,300 units and its break-even sales are 36,757 units. What is the margin of safety in dollars?

Question

Quizplus · Accepted Answer

The margin of safety in units is the difference between current sales and break-even sales, which is 41,300 units - 36,757 units = 4,543 units. To find the margin of safety in dollars, multiply the margin of safety in units by the selling price per unit: 4,543 units * $240/unit = $1,090,320.

Majid Corporation Sells a Product for $240 Per Unit