Problem

Margin of safetyJensen Company makes a product that sells for $38 per unit. The company pa...

Margin of safety

Jensen Company makes a product that sells for $38 per unit. The company pays $16 per unit for the variable costs of the product and incurs annual fixed costs of $176,000. Jensen expects to sell 21,000 units of product.

Required

Determine Jensen’s margin of safety in units, sales dollars, and as a percentage.

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