The manager at Tom's Taxidermy expects to sell 900 units at $80 each unit. In order for the manager to breakeven, the manager must sell 100 units. What is the margin of safety in dollars?

Question

Quizplus · Accepted Answer

The margin of safety in dollars is calculated as (Actual or Budgeted Sales - Break-even Sales) * Selling Price per Unit. Here, it is (900 units - 100 units) * $80 = 800 units * $80 = $64,000.

The Manager at Tom's Taxidermy Expects to Sell 900 Units