Question

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below:

Selling price		$29	per unit
Variable expenses		$13	per unit
Fixed expenses		$13,120	per month
Unit sales		970	units per month

Required:
1.	Compute the company’s margin of safety.

     

  

2.	Compute the company’s margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).

     

Answer 1