Breakeven and Margin of Safety

A company is currently selling 100,000 units of it product at a sales price of $10 each. The total variable costs per unit are $6.00. Total fixed costs are $120,000.

Determine breakeven in units and revenue dollars.

Determine margin of safety in units and revenue dollars.

Using the data from exercise 1 above, determine the margin of safety percentage (margin of safety in units divided by actual unit sales; or margin of safety in dollars divided actual sales in dollars).