eBookQuestion Content AreaMargin of SafetyKearney Company, operating at full capacity, sold $400,000$ units at a price of $$246\mathrm{.}60$ per unit during $20$Y$5.$ Its income statement for $20$Y$5$ is as follows:Line Item DescriptionAmountAmountSales $ $98,640,000$Cost of goods sold $(44,500,000)$Gross profit $ $54,140,000$Expenses: Selling expenses$$8,000,000$ Administrative expenses$3,000,000$ Total expenses $(11,000,000)$Operating income $ $43,140,000$The division of costs between fixed and variable is as follows: FixedVariableCost of good sold$28\%72\%$Selling expenses$25\%75\%$Administrative expenses$80\%20\%$Management is considering a plant expansion program that will permit an increase of $$8,631,000(35,000$ units at $$246\mathrm{.}60)$ in yearly sales. The expansion will increase fixed costs by $$3,600,000$ but will not affect the relationship between sales and variable costs.Round the answers to one decimal place$\mathrm{.}1.$ Margin of safety for $20$Y$5.$fill in the blank $1$ of $1\%2.$ Margin of safety under the proposed program assuming $20$Y$5$ sales.fill in the blank $1$ of $1\%$Feedback AreaFeedback$1.$ Divide the margin of safety in dollars $($or units$)$ by current sales dollars $($or units$)$ to calculate margin of safety as a percentage of current sales$\mathrm{.}2.$ Divide the margin of safety in dollars $($or units$)$ by current sales dollars $($or units$)$ to calculate the margin of safety as a percentage of current sales.Check My Work