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Margin of Safety Head-First Company plans to sell 4,870 bicycle helmets at $68 each in the...

  1. Margin of Safety

    Head-First Company plans to sell 4,870 bicycle helmets at $68 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 2,152.

    Required:

    1. Calculate the margin of safety in terms of the number of units.
    units

    2. Calculate the margin of safety in terms of sales revenue.
    $

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Answer #1

Answers 1) calculation of the margin of safety in terms of the number of units. Margin of safely interms of units = Budgeted

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