Dickus Corporation's only product sells for $100 per unit. Its current sales are 35,600 units and its break-even sales are 29,192 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 35,600 units) (a)$3,560,000 
Break-even sales (at 29,192 units) 2,919,200 
Margin of safety (in dollars) (b)$640,800 
Margin of safety percentage, (b) ÷ (a) 18%

Business

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