Answer:
Margin of safety= $2,212
Explanation:
Giving the following information:
Selling price per unit= $3.16
The breakeven point in units is 3,600, and the expected sales in units are 4,300.
The margin of safety is calculated using the following formula:
Margin of safety= (current sales level - break-even point)
Current sales level= 4,300*3.16= $13,588
Break-even point dollars= 3,600*3.16= 11,376
Margin of safety= 13,588 - 11,376= $2,212
