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Burke Company has a break-even of $600,000 in total sales. Assuming the company sells its product for $40 per unit, what is its margin of safety in units if sales total $1,000,000

Respuesta :

Answer:

The margin of safety in units is 10,000 units

Explanation:

The computation of the margin of safety in units is shown below:

The Margin of safety in units is

= Budgeted or actual sales - break even sales

= ($1,000,000 ÷ $40 per unit) - ($600,000 ÷ $40 per unit)

= 25,000 units - 15,000 units

= 10,000 units

Hence, the margin of safety in units is 10,000 units

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