Artisan Works is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.The data are as follows:

If Artisan expects to sell 60 units per month,what is his margin of safety expressed in units per month?

Question

Artisan Works is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.The data are as follows:

If Artisan expects to sell 60 units per month,what is his margin of safety expressed in units per month?

Quizplus · Accepted Answer

A)
 11ea86ed_2bab_29e5_8b27_25e1d8f0d20b_TB3056_00 Breakeven sales in units = (Fixed costs + Target profit)/ Contribution margin per unit
Breakeven sales in units = ($8370 + 0)/ $310 = 27 units
Expected sales - Breakeven sales = Margin of safety in units
60 units - 27 units = 33 units

Artisan Works Is Owned and Operated by a Craftsman Who