Question

​Hyde's Headphones sells deluxe headphones for​ $70 each. Unit variable expenses total​ $60. The breakeven sales in units is​ 1,700 and budgeted sales in units is​ 4,177. What is the margin of safety in​ dollars?

Answer 1

Answer:

$173,390

Explanation:

Given that,

Selling price = $70 each

Unit variable expenses = $60

Break-even sales in units =​ 1,700

Budgeted sales in units = 4,177

Margin of safety in dollars:

= [Total sales - break even sales) x Sale price

= [4,177 - 1,700] x $70

= 2,477 × $70

= $173,390

Therefore, the margin of safety in​ dollars is $173,390.