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eBook Margin of Safety Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $12.24 per string. The
eBook Margin of Safety Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $12.24 per string. The variable costs per string are as follows: Direct materials Direct labor $1.87 1.70 Variable factory overhead Variable selling expense 0.57 0.421 Fixed manufacturing cost totals $521,472 per year. Administrative cost (all fixed) totals $379.392. Comer expects to sell 217,100 strings of light next year. Required: 1. Calculate the break-even point in units. units: 2. Calculate the margin of safety in units. units 3. Calculate the margin of safety in dollars. 4. Conceptual Connection: Suppose Comer actually experiences a price decrease next year while all other costs and the number of units sold remain the same. Would this increase or decrease risk for the com happen to the number of break-even units and to the margin of safety.) 4
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