Use the following information to determine the margin of safety in dollars: $\begin{array} { l c }
\text { Unit sales } & 50,000 \text { Units } \
\text { Dollar sales } & \$ 500,000 \
\text { Fixed costs } & \$ 204,000 \
\text { Variable costs } & \$ 187,500
\end{array}$
A) $173,600.
B) $500,000.
C) $108,500.
D) $88,500.
E) $326,400.

Question

Use the following information to determine the margin of safety in dollars: $\begin{array} { l c } 
\text { Unit sales } & 50,000 \text { Units } \
\text { Dollar sales } & \$ 500,000 \
\text { Fixed costs } & \$ 204,000 \
\text { Variable costs } & \$ 187,500
\end{array}$
A) $173,600.
B) $500,000.
C) $108,500.
D) $88,500.
E) $326,400.

Quizplus · Accepted Answer

Margin of safety = Dollar sales - (Fixed costs + Variable costs)= $500,000 - ($204,000 + $187,500)= $500,000 - $391,500= $108,500

Use the Following Information to Determine the Margin of Safety