Question

​Tom's Taxidermy expects to sell​ 1,200 units of its specialty preservation product. The managerial accountant reported that manager must sell 700 units of specialty product to breakeven. Compute the margin of safety in units.

Answer 1

Answer:

The margin of safety is 500 units

Explanation:

Margin of safety is the amount by which sales may fall before a company makes a loss.

It is Calculated as Expected Sales less Break Even Units

Remember : Break-even is the level at which a Company makes neither a profit or a loss

Margin of Safety = 1200 units -700 units

                               =500 units