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Margin of Safety

Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $11.75 per string. The variable costs per string are as follows:

Direct materials	$1.87
Direct labor	1.70
Variable factory overhead	0.57
Variable selling expense	0.42

Fixed manufacturing cost totals $528,465 per year. Administrative cost (all fixed) totals $382,508. Comer expects to sell 224,200 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. $___