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Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $ 8.00 Direct labor 3.00 Factory overhead $ 200,000 1.50 Selling expenses:

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Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $ 8.00 Direct labor 3.00 Factory overhead $ 200,000 1.50 Selling expenses: Advertising 1,450,000 Sales salaries and commissions 93,000 1.85 Travel 340,000 Miscellaneous selling expense 2,000 Administrative expenses: Office and officers' salaries 300,000 10,000 Supplies 0.50 Miscellaneous administrative expense 5,000 0.05 Total $2,400,000 $15.00 It is expected that 400,000 units will be sold at a price of $25 a unit. Maximum sales within the relevant range are 500,000 units. Determine the following based upon the estimates for 2048: 1. Margin of safety for 2048 in units sold. $ 240,000 x 2. Margin of safety for 2048 in sales dollars. $ 240,000 3. Margin of safety for 20Y8 as a percentage of sales. 40 %

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