What is the margin of safety in managerial accounting?

Serendipity Sound, Inc. manufactures and sells compact discs. Price and cost data are as follows Selling price per unit (package of two CDs) 25 . 00 Variable costs per unit: Direct material 10 . 50 Direct labor 5.00 Manufacturing overhead Selling expenses 3. 00 1. 30 Total variable costs per unit 19 . 80 Annual fixed costs : Manufacturing overhead Selling and administrative 192, 080 $ 276, 000 Total fixed costs $ 468, 000 Forecasted annual sales volume (120, 000 units ) $3, 600, 000 In the following requirements, ignore income taxes 4. What is the firm's margin of safety