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Exercise 5-8 (Algo) Compute the Margin of Safety (LO5-7) Molander Corporation is a distributor of a sun umbrella used at reso

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Answer #1

Contribution margin=Sales-Variable cost

=(29-18)=$11 per unit

Breakeven=Fixed expenses/Contribution margin

=9350/11

=850 units

Margin of safety=Total sales-Breakeven sales

=1000-850

=150 units

=(150*29)=$4350

Margin of safety %=Margin of safety/Total sales

=150/1000

=15%

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