Break-Even and Margin of Safety Relationships

At a recent staff meeting, the management of Boost Technologies Inc. was considering discontinuing the Rocket Man line of electronic games from the product line. The chief financial analyst reported the following current monthly data for the Rocket Man:

Units of sales	420,000
Break-even units	472,500
Margin of safety in units	29,400

If 420,000 units are sold and sales at the break-even point are 472,500 units, there is margin of safety.