The following monthly data are available for Marketplace, Inc. which produces only one product which it sells for $22 each. Its unit variable costs are $9, and its total fixed expenses are $9,100. Actual sales for the month of May totalled 4,000 units. How much is the margin of safety for the company for May? Solution 119

BEP in units: $22 - $9X - $9,100 = 0

BEP in units = 700 units

Units at current sales level = 4,000

Margin of safety = (4,000 - 700) x $22 = $72,600

Sales can drop, or fixed costs can rise, by $72,600 before the company incurs a loss. Please simplify how to come up with the solution to figure this problem out?