Homework Answers
Answer provided assuming variable cost = $85 (which is missing in the question)
Margin of safety = Sales – break even sales
Break even point = Fixed costs/Contribution margin
=$10,000/(150-85)
= 154 units
Break even sales= 154 units* 150(sale price)
= $23,100
Margin of safety = $30,000 - $23,100
=$ 6,900
*Units in breakeven rounded off
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