Margin of Safety

Yellow Sticker Companys variable expenses are 40% of sales. The company has monthly fixed expenses of $15,000 and sells each unit for $0.50. The monthly target operating income is $11,250.

a. What is the monthly margin of safety in dollars if Yellow Sticker Company achieves its operating income goal?

$Answer in dollars

b. What is the monthly margin of safety in units if Yellow Sticker Company achieves its operating income goal?

Answer units