Margin of Safety

Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $13.15 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 $602,159 per year. Administrative cost (all fixed) totals $402,871. Comer expects to sell 243,100 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. ($)