Burke Company has a break-even of $600,000 in total sales.Assuming the company sells its product for $50 per unit,what is its margin of safety in units if sales total $850,000?
A) 5,000 units
B) 250,000 units
C) 12,000 units
D) 17,000 units

Question

Quizplus · Accepted Answer

The margin of safety in units is calculated by subtracting the break-even sales from the actual sales and then dividing by the selling price per unit. Here, ($850,000 - $600,000) / $50 = 5,000 units.

Burke Company Has a Break-Even of $600,000 in Total Sales