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 | % | |
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