Selling price per unit (package of 2 CDs)......................................$26.50Variable costs per unit:Direct material...............................................................................................................$6.00Direct labor......................................................................................................................$5.00Artist's royalties..............................................................................................................$4.50Manufacturing overhead..........................................................................................$3.00Selling expenses............................................................................................................$1.30Total variable costs per unit............................................................$19.80Annual fixed costs:Manufacturing overhead..........................................................................................$175,000Selling and administrative.......................................................................................$250,000Total fixed costs................................................................................$425,000Forecasted annual sales volume (120,000 units).........................$3,180,000What is the firm's margin of safety?

WS. Selling price per unit (package of 2 CDs). $26.50 Variable costs per unit: Direct material... $6.00 Direct labor.... $5.00 Artist's royalties..... $4.50 Manufacturing overhead.... $3.00 Selling expenses.... $1.30 Total variable costs per unit... $19.80 Annual fixed costs: Manufacturing $175,000 overhead...... Selling and $250,000 administrative...... Total fixed costs....... $425,000 Forecasted annual sales volume (120,000 units). $3,180,000 What is the firm's margin of safety