Strong Wood Company is a distributor of patio furniture. Data concerning the next month's budget appear below.
Selling price $290.00
Variable expense $174.00
Fixed expense $158,000.00
Unit sales 1,500 units per month
a. What is the company's margin of safety? (Please show all work so I am able to learn the formulas)
b. What is the company's margin of safety as a percentage of sales? (Please show all work so I am able to learn the formulas)
I am very interested in learning how to do this, so any help with formulas is great, and please show all computations in your work.
Your solution is below. Thank you for using BrainMass.
1500 x 290 = 435000
1500 x 174 = 261000
1500 x 158 = 237000
261000 + 237000 = 498000
This solution calculates the margin of safety and margin of safety as a percentage of sales for Strong Wood Company. All calculations are shown and explained.