Knezevich Corporation makes a product that sells for $230 per unit. The product's current sales are 36,900 units and its break-even sales are 32,103 units. Required:Compute the margin of safety in both dollars and as a percentage of sales.
What will be an ideal response?
| Sales (at the current volume of 36,900 units) (a) | $ | 8,487,000 | |
| Break-even sales (at 32,103 units) | 7,383,690 | ||
| Margin of safety (in dollars) (b) | $ | 1,103,310 | |
| Margin of safety percentage, (b) ÷ (a) | 13 | % | |
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