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Hi, John
i’m getting 30,000 but i don’t get it why are we dividing 30,000/2 = 15000? pls kindly explain, thanks alot.A company makes a single product which it sells for $2 per unit. Fixed costs are $13,000 per month.
The contribution/sales ratio is 40%. Sales revenue is $62,500.
What is the margin of safety (in units)?
A. 15,000
B. 16,250
C. 30,000
D. 31,250$30,000 is the margin of safety in $’s of revenue.
However the question asks for it in units. The selling price is $2, and therefore in units it is 30,000/2 = 15,000.
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