Question

​Moe's Pizza Shop sells a large pizza for​ $12.00. Unit variable expenses total​ $8.00. The breakeven sales in units is​ 7,000 and budgeted sales in units is​ 8,000. What is the margin of safety in​ dollars? A. ​$180,000 B. ​$1,000 C. ​$12,000 D. ​$83

Answer 1

Answer:

Margin of safety= $12,000

Explanation:

Giving the following information:

Moe's Pizza Shop sells a large pizza for​ $12.00. Unit variable expenses total​ $8.00. The breakeven sales in units are​ 7,000 and budgeted sales in units are​ 8,000

To calculate the margin of safety in dollars, we need to use the following formula:

Margin of safety= (current sales level - break-even point)

Margin of safety= (8,000*12) - (7,000*12)= $12,000