The following monthly data are available for the Eager Company and its only product: The margin of safety for the company for March was:

Question

The following monthly data are available for the Eager Company and its only product:  The margin of safety for the company for March was:

Quizplus · Accepted Answer

CM ratio = Unit contribution margin F1F1F1S1F1F1F10 Unit selling price
= ($75 - $30)F1F1F1S1F1F1F10 $75
= $45 F1F1F1S1F1F1F10 $75 = 0.60
Dollar sales to break even = Fixed expenses F1F1F1S1F1F1F10 CM ratio
= $180,000 F1F1F1S1F1F1F10 0.60
= $300,000
Margin of safety in dollars = Total actual sales - Break-even sales
= ($75 per unit F1F1F1S1F1F1F10 7,000 units)- $300,000
= $525,000 - $300,000 = $225,000

The Following Monthly Data Are Available for the Eager Company