C @l e Read rec- 5.00 points 11-a What is the margin of safety in dollars? (Roun

Question

C @l e Read rec- 5.00 points 11-a What is the margin of safety in dollars? (Round intermediate percentage answer to 2 decimal places. Round your answer to nearest dollar amount 11-b What is the margin of salety percentage? (Round your percentage answer to nearest whole number , .1234 should be entered as 12 Required Information Reterences Worksheet Odo Company prepared tne tollowing contributon format income stonement based on a tales volume of 100 unts me relevare range of production·500 uns totsoort Learning Objee Sales S 21800 12.600 04-01 Explain h changes in act affect contribut margin and operating cle expenses Contreuton maign Ftxed expenses 9200 Learning Objec 04-03 Use the contribution m Net operstng income 1748 ratio to comput changes in contribution m and operating

Explanation / Answer

Margin Of Safety = Budgeted Sales Break-even Sales

Budgeted sales = 1000 units ,or $21800

Break-Even sales = Fixed cost / Contribution margin

= 7452 / 9.2 = 810 units

or $ 17,658

Margin of safety = 21800 - 17658 = $ 4142

Margin of safety Percentage = (Budgeted sales - Break-even sales) /Budgeted sales *100

= (1000 - 810) / 1000 *100 = 19 %

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