Otto Company makes a product that sells for $5 per unit. The company pays $3 per unit

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Otto Company makes a product that sells for $5 per unit. The company pays $3 per unit for the variable costs of the product and incurs fixed costs of $50,000. Otto expects to sell 30,000 units of product.

Required
Determine Otto’s margin of safety in units, sales dollars, and as a percentage. Round the percentage to one decimal place.

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Survey of Accounting

ISBN: 978-0077862374

4th edition

Authors: Thomas Edmonds, Christopher, Philip Olds, Frances McNair, Bor

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