Question

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price Variable expenses Fixed expenses Unit sales $27 per unit $19 per unit $6,640 per month 980 units per month Required: 1. Compute the company's margin of safety. (Do not round intermediate calculations.) Margin of safety 2. Compute the company's margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (i.e.1234 should be entered as 12.34). Margin of safety

Answer 1

Fixed expenses	6640
Divide by Unit Contribution margin	8	=27-19
Break-even sales	830
Unit sales	980
Less: Break-even sales	830
Margin of safety units	150
1
Margin of safety	4050	=150*27
2
Margin of safety %	15.31%	=150/980