Exercise 5-8 Compute the Margin of Safety [LO5-7]

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next months budget appear below:

Selling price		$30	per unit
Variable expenses		$15	per unit
Fixed expenses		$12,600	per month
Unit sales		990	units per month

Required:

1.

Compute the companys margin of safety.

Margin of safety

2.

Compute the companys margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).

Margin of safety

%