Rustic Replicas is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 43 flintlock muskets per month.The cost data for the muskets are as follows:

If Rustic expects to sell 40 units per month,what is his margin of safety expressed in units per month?
A)10 units
B)30 units
C)16 units
D)24 units

Question

Rustic Replicas is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 43 flintlock muskets per month.The cost data for the muskets are as follows:

If Rustic expects to sell 40 units per month,what is his margin of safety expressed in units per month?

If Rustic expects to sell 40 units per month,what is his margin of safety expressed in units per month?
A)10 units 
B)30 units 
C)16 units 
D)24 units

Quizplus · Accepted Answer

A)
 11ea8a42_4f9a_c89b_8b44_537f47a1f907_TB5024_00 Required sales in units = (Fixed costs + Target profit)÷ Contribution margin per unit
Required sales in units = ($8,100 + 0)÷ $270 = 30 units
Expected sales - Breakeven sales = Margin of safety in units
40 units - 30 units = 10 units

Rustic Replicas Is Owned and Operated by a Craftsman Who