Morganti Corporation sells a product for $140 per unit. The product's current sales are 40,700 units and its break-even sales are 31,339 units. What is the margin of safety in dollars?
A)$3,798,667
B)$5,698,000
C)$4,387,460
D)$1,310,540

Question

Quizplus · Accepted Answer

The margin of safety in units is the difference between actual sales and break-even sales, which is 40,700 - 31,339 = 9,361 units. In dollars, this is 9,361 units * $140/unit = $1,310,540.

Morganti Corporation Sells a Product for $140 Per Unit