Wanita Enterprises sells computer flash drives for $ 3.44 per unit. Unit variable cost is $ 0.05. The breakeven point in units is 3 comma 600, and expected sales in units are 4 comma 300. What is the margin of safety in dollars? A. $ 35 B. $ 12 comma 384 C. $ 2 comma 373 D. $ 2 comma 408

D. $ 2 comma 408

Explanation:

Margin of safety is the contribution over break-even point which make the profit for the business. It is the actual margin from which the business is safe from loss.

Sales Price = $3.44 per unit

Variable cost = 0.05 per unit

Break-even point = 3,600 per unit

Expected sale = 4,300 per unit

Margin of safety sales volume = Total Sales - Break-even point

Margin of safety sales volume = 4,300 - 3,600 = 700 units

Margin of Safety in dollars = 700 units x 3.44 = $2,408

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