Compute the Margin of Safety
Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month budget appear below:
|
Selling price
|
$30 per unit
|
|
Variable expense
|
$20 per unit
|
|
Fixed expense
|
$7,500 per monyh
|
|
Unit sales
|
1,000 units per month
|
Required
1.Compute the company margin of safety.
2.Compute the company margin of safety as a percentage of its sales.