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Smith Company produces desk lamps. The information for June indicated that the selling price was $25 per unit, variable costs were $15 per unit, and
Smith Company produces desk lamps. The information for June indicated that the selling price was $25 per unit, variable costs were $15 per unit, and fixed costs totaled $6,000. Smith currently sells 1,100 lamps and earns $5,000 of profit. How much is Smith's margin of safety in dollars and margin of safety ratio? The answers are $12,500 and 45.5% respectively. How do you get these answers?
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