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Anna35 [415]
3 years ago
6

Majid Corporation sells a product for $195 per unit. The product's current sales are 42,300 units and its break-even sales are 3

5,175 units. What is the margin of safety in dollars?
Business
1 answer:
evablogger [386]3 years ago
5 0

Answer:

$1,389,375

Explanation:

Data provided as per the question:-

Product per unit = $195

Current sales = 42,300 units

Break-even sales = 35,175 units

The computation of margin of safety in dollars is shown below:-

Margin of safety (in units) = Total sales - Break-even sales

= 42,300 - 35,175

=7,125 units

Margin of safety (in dollars) = Margin of safety × Product per unit

=(7,125 × $195)

= $1,389,375

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