Problem:
Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below:
- Selling price $23 per unit
- Variable expenses $17 per unit
- Fixed expenses $4,860 per month
- Unit sales 960 units per month
Required:
Question 1: Compute the company's margin of safety.
Question 2: Compute the company's margin of safety as a percentage of its sales.
Note: Please show the work not just the answer.