The following monthly data are available for the Wyatt Corporation and its only product: The margin of safety for the company during May was:

Question

The following monthly data are available for the Wyatt Corporation and its only product:  The margin of safety for the company during May was:

Quizplus · Accepted Answer

Unit sales to break even = Fixed expenses ÷ Unit CM
= $50, 000 ÷ ($36 per unit - $28 per unit)= 6, 250 units
Margin of safety in dollars = Total budgeted (or actual)sales - Break-even sales
= ($36 per unit × 7, 000 units)- ($36 per unit × 6, 250 units)
= $252, 000 - $225, 000
= $27, 000

The Following Monthly Data Are Available for the Wyatt Corporation