Answer:
Margin of safety= $4,257
Explanation:
Giving the following information:
The breakeven point in units is 3,400, and the expected sales in units are 4,500.
First, we need to determine the dollar amount of sales:
Break-even point= 3,400*3.87= $13,158
Current sales= 4,500*3.87= $17,415
Margin of safety= (current sales level - break-even point)
Margin of safety= 17,415 - 13,158= $4,257
