What is the margin of safety?

Each division of Calcul Co manufactures a single product.

In one of the divisions the standard profit of each unit is calculated as:

Selling price$135

Total cost$100

Profit$35

It is estimated that fixed costs comprise 54% of the total cost of the product. The budgeted production and sales volumes for the next month is 3,954 units.

What is the margin of safety?
A . 39・3%
B . 43・2%
C . 56・8%
D . 60・7%

View Answer

Answer: A