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