Malley Corporation has provided the following data concerning its only product: What is the margin of safety in dollars?
A)$1,390,000
B)$562,950
C)$2,085,000
D)$1,522,050

Question

Malley Corporation has provided the following data concerning its only product:  What is the margin of safety in dollars?
A)$1,390,000 
B)$562,950 
C)$2,085,000 
D)$1,522,050

Quizplus · Accepted Answer

The margin of safety in dollars can be calculated as follows:
Sales - Break-even point = Margin of safety
$6,685,000 - $5,122,050 = $1,562,950
Therefore, the margin of safety in dollars is $1,562,950, which corresponds to choice B.

Malley Corporation Has Provided the Following Data Concerning Its Only