Use the information below to answer the following question(s).
Dr. Mickey Finn performs a certain procedure for $400.00. The fixed costs are $8,000 and variable costs are $200.00 per procedure.
-What is the margin of safety in units assuming the procedure is performed 200 times?

Question

Quizplus · Accepted Answer

The margin of safety in units is calculated as the actual sales minus the break-even sales. The break-even point in units is fixed costs divided by the contribution margin per unit ($400 - $200 = $200). Break-even units = $8,000 / $200 = 40 units. Margin of safety = 200 units - 40 units = 160 units.

Use the Information Below to Answer the Following Question(s)